File No. 33-6013
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ X ]
Pre-Effective Amendment No. [ ]
Post-Effective Amendment No. 18 [ X ]
and/or
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ X ]
Amendment No. 18 [ X ]
(Check appropriate box or boxes.)
DREYFUS PREMIER VALUE FUND
(Exact Name of Registrant as Specified in Charter)
c/o The Dreyfus Corporation
200 Park Avenue, New York, New York 10166
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (212) 922-6000
Mark N. Jacobs, Esq.
200 Park Avenue
New York, New York 10166
(Name and Address of Agent for Service)
It is proposed that this filing will become effective (check appropriate box)
immediately upon filing pursuant to paragraph (b)
----
X on March 3, 1997 pursuant to paragraph (b)
----
60 days after filing pursuant to paragraph (a)(i)
----
on (date) pursuant to paragraph (a)(i)
----
75 days after filing pursuant to paragraph (a)(ii)
----
on (date) pursuant to paragraph (a)(ii) of Rule 485
----
If appropriate, check the following box:
this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
----
Registrant has registered an indefinite number of shares of its
beneficial interest under the Securities Act of 1933 pursuant to Section
24(f) of the Investment Company Act of 1940. Registrant's Rule 24f-2 Notice
for the fiscal year ended October 31, 1996 was filed on December 30, 1996.
DREYFUS PREMIER VALUE FUND
Cross-Reference Sheet Pursuant to Rule 495(b)
Items in
Part A of
Form N-1A Caption Page
_________ _______ ____
1 Cover Page Cover
2 Synopsis 3
3 Condensed Financial Information 4
4 General Description of Registrant 8
5 Management of the Fund 11
5(a) Management's Discussion of Fund's Performance *
6 Capital Stock and Other Securities 33
7 Purchase of Securities Being Offered 13
8 Redemption or Repurchase 24
9 Pending Legal Proceedings *
Items in
Part B of
Form N-1A
- ---------
10 Cover Page Cover
11 Table of Contents Cover
12 General Information and History B-31
13 Investment Objectives and Policies B-2
14 Management of the Fund B-11
15 Control Persons and Principal B-14
Holders of Securities
16 Investment Advisory and Other B-16
Services
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
DREYFUS PREMIER VALUE FUND
Cross-Reference Sheet Pursuant to Rule 495(b) (continued)
Items in
Part B of
Form N-1A Caption Page
_________ _______ _____
17 Brokerage Allocation B-29
18 Capital Stock and Other Securities B-31
19 Purchase, Redemption and Pricing B-18, B-21,
of Securities Being Offered B-26
20 Tax Status *
21 Underwriters B-18
22 Calculations of Performance Data B-30
23 Financial Statements B-38
Items in
Part C of
Form N-1A
_________
24 Financial Statements and Exhibits C-1
25 Persons Controlled by or Under C-3
Common Control with Registrant
26 Number of Holders of Securities C-3
27 Indemnification C-3
28 Business and Other Connections of C-4
Investment Adviser
29 Principal Underwriters C-11
30 Location of Accounts and Records C-14
31 Management Services C-14
32 Undertakings C-14
_____________________________________
NOTE: * Omitted since answer is negative or inapplicable.
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DREYFUS PREMIER VALUE FUND
(LION LOGO)Registration Mark
PROSPECTUS MARCH 3, 1997
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Dreyfus Premier Value Fund (the "Fund") is an open-end, non-diversified,
management investment company, known as a mutual fund. The Fund's investment
objective is capital growth. The Fund invests primarily in equity securities of
domestic and foreign issuers which are characterized as "value" companies
according to criteria established by The Dreyfus Corporation. In addition to
usual investment practices, the Fund may use speculative investment techniques
such as short-selling, leveraging and options transactions. The Fund also may
engage in futures transactions.
By this Prospectus, the Fund is offering four classes of shares --
Class A, Class B, Class C and Class R -- which are described herein. See
"Alternative Purchase Methods."
You can purchase or redeem all Classes of shares by telephone using
the TELETRANSFER Privilege.
The Dreyfus Corporation professionally manages the Fund's portfolio.
This Prospectus sets forth concisely information about the Fund that
you should know before investing. It should be read and retained for future
reference.
The Statement of Additional Information, dated March 3, 1997 which
may be revised from time to time, provides a further discussion of certain
areas in this Prospectus and other matters which may be of interest to some
investors. It has been filed with the Securities and Exchange Commission and
is incorporated herein by reference. The Securities and Exchange Commission
maintains a Web site (http://www.sec.gov) that contains the Statement of
Additional Information, material incorporated by reference, and other
information regarding the Fund. For a free copy of the Statement of
Additional Information, write to the Fund at 144 Glenn Curtiss Boulevard,
Uniondale, New York 11556-1044, or call 1-800-554-4611. When telephoning, ask
for Operator 144.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
AGENCY. MUTUAL FUND SHARES INVOLVE CERTAIN INVESTMENT RISKS, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
- ------------------------------------------------------------------------------
TABLE OF CONTENTS
Fee Table................................................. 3
Condensed Financial Information........................... 4
Alternative Purchase Methods.............................. 7
Description of the Fund................................... 8
Management of the Fund.................................... 11
How to Buy Shares ........................................ 13
Shareholder Services...................................... 19
How to Redeem Shares...................................... 24
Distribution Plan and Shareholder Services Plan........... 29
Dividends, Distributions and Taxes........................ 29
Performance Information................................... 32
General Information....................................... 33
Appendix.................................................. 34
PAGE 2
<TABLE>
<CAPTION>
FEE TABLE
SHAREHOLDER TRANSACTION EXPENSES CLASS A CLASS B CLASS C CLASS R
<S> <C> <C> <C> <C>
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)............ 5.75% None None None
Maximum Deferred Sales Charge Imposed on Redemptions
(as a percentage of the amount subject to charge)...... None* 4.00% 1.00% None
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Management Fees.............. .75% .75% .75% .75%
12b-1 Fees................... None .75% .75% None
Other Expenses............... .44% .44% .44% .22%
Total Fund Operating Expenses..... 1.19% 1.94% 1.94% .97%
EXAMPLE:
You would pay the following expenses on
a $1,000 investment, assuming (1) 5%
annual return and (2) except where noted,
redemption at the end of each time period: CLASS A CLASS B CLASS C CLASS R
1 YEAR. $ 69 $60/$20** $30/$20** $ 10
3 YEARS.. $ 93 $91/$61** $ 61 $ 31
5 YEARS.. $119 $125/$105** $105 $ 54
10 YEARS.. $194 $189*** $226 $119
</TABLE>
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* A contingent deferred sales charge of 1.00% may be assessed on certain
redemptions of Class A shares purchased without an initial sales charge as
part of an investment of $1 million or more.
**Assuming no redemption of shares.
*** Ten year figure assumes conversion of Class B shares to Class A shares
at the end of the sixth year following
the date of purchase.
- ------------------------------------------------------------------------------
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED
AS REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE
GREATER OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES
A 5% ANNUAL RETURN, THE FUND'S ACTUAL PERFORMANCE WILL VARY AND MAY
RESULT IN AN ACTUAL RETURN GREATER OR LESS THAN 5%.
- ------------------------------------------------------------------------------
The purpose of the foregoing table is to assist you in
understanding the costs and expenses borne by the Fund and investors, the
payment of which will reduce investors' annual return. Long-term
investors in Class B or Class C shares could pay more in 12b-1 fees than
the economic equivalent of paying a front-end sales charge. Certain
Service Agents (as defined below) may charge their clients direct fees
for effecting transactions in Fund shares; such fees are not reflected in
the foregoing table. See "Management of the Fund," "How to Buy Shares,"
"How to Redeem Shares" and "Distribution Plan and Shareholder Services
Plan."
PAGE 3
CONDENSED FINANCIAL INFORMATION
The information in the following table has been audited by
Ernst & Young LLP, the Fund's independent auditors, whose report thereon
appears in the Statement of Additional Information. Further financial
data and related notes are included in the Statement of Additional
Information, available upon request.
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a
Class A share of beneficial interest outstanding, total investment
return, ratios to average net assets and other supplemental data for each
year indicated. This information has been derived from the Fund's
financial statements.
<TABLE>
<CAPTION>
CLASS A SHARES
--------------------------------------------------------------------------------
YEAR ENDED OCTOBER 31,
--------------------------------------------------------------------------------
PER SHARE DATA: 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
------ ------- ------ ------ ------- ------ ------ ------ ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of year..... $12.51 $15.79 $15.85 $18.73 $18.03 $22.12 $19.90 $23.77 $19.83 $21.59
------ ------- ------ ------ ------- ------ ------ ------ ------- -------
INVESTMENT OPERATIONS:
Investment income_net......... .13 1.00 .48 .31 .21 .06 .03 .01 .31 .22
Net realized and unrealized gain (loss)
on investment................... 3.15 (.52) 3.70 (.35) 5.77 (.46) 3.89 (1.54) 2.04 3.01
------ ------- ------ ------ ------- ------ ------ ------ ------- -------
TOTAL FROM INVESTMENT OPERATIONS..... 3.28 .48 4.18 (.04) 5.98 (.40) 3.92 (1.53) 2.35 3.23
------ ------- ------ ------ ------- ------ ------ ------ ------- -------
DISTRIBUTIONS:
Dividends from investment income--net... -- (.20) (1.30) (.21) (.34) (.14) (.05) -- (.05) (.31)
Dividends in excess of investment
income-net...... -- -- -- -- -- -- -- (.12) -- --
Dividends from net realized gain
on investments....... -- (.22) -- (.45) (1.55) (1.68) -- (2.29) (.54) (2.09)
------ ------- ------ ------ ------- ------ ------ ------ ------- -------
TOTAL DISTRIBUTIONS............... -- (.42) (1.30) (.66) (1.89) (1.82) (.05) (2.41) (.59) (2.40)
------ ------- ------ ------ ------- ------ ------ ------ ------- -------
Net asset value, end of year......... $15.79 $15.85 $18.73 $18.03 $22.12 $19.90 $23.77 $19.83 $21.59 $22.42
====== ====== ====== ======= ====== ====== ====== ======= ====== ======
TOTAL INVESTMENT RETURN............. 26.22% 2.88% 28.59% (.31%) 36.50% (2.04%) 19.71% (6.92%) 12.43% 15.95%
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to
average net assets........ 1.59% 1.48% 1.50% 1.50% 1.35% 1.30% 1.27% 1.29% 1.22% 1.19%
Ratio of interest expense, loan commitment fees
and dividends on securities sold short to
average net assets....... .32% .60% .59% 1.39% .58% .38% .47% .25% .05% --
Ratio of net investment income
to average net assets.... 1.14% 5.71% 2.63% 1.66% 1.07% .22% .16% .04% 1.51% .94%
Decrease reflected in above expense
ratios due to expense limitation.... .10% .19% .29% .08% -- -- -- -- -- --
Portfolio Turnover Rate.............. 321.23% 167.64% 228.12% 275.33% 207.10% 204.73% 237.14% 199.13% 244.82% 147.64%
Average Commission Rate paid(1)...... -- -- -- -- -- -- -- -- -- $.1029
Net Assets, end of year
(000's omitted)... $111,896 $104,772 $106,180 $102,421 $145,717 $243,148 $276,022 $239,407 $208,786 $207,388
</TABLE>
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(1)For fiscal years beginning November 1, 1995, the Fund is required to
disclose its average commission rate paid per share for purchases and sales
of investment securities.
PAGE 4
Contained below is per share operating performance data for a
Class B, Class C and Class R share of beneficial interest outstanding,
total investment return, ratio to average net assets and other
supplemental data for each period indicated. This information has been
derived from the Fund's financial statements.
<TABLE>
<CAPTION>
CLASS B SHARES CLASS C SHARES CLASS R SHARES
------------------ --------------------- -----------------
YEAR ENDED PERIOD ENDED PERIOD ENDED
OCTOBER 31, OCTOBER 31, OCTOBER 31,
------------------------------ --------------------- -----------------
PER SHARE DATA: 1993(1) 1994 1995 1996 1995(2) 1996 1995(2) 1996
------ ------ ------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period....... $21.38 $23.62 $19.58 $21.17 $21.21 $21.16 $21.60 $21.60
------ ------ ----- ------- ------ ------- ------ ------
INVESTMENT OPERATIONS:
Investment income (loss)-net............ (.07) (.04) .14 .04 (.04) .06 -- .40
Net realized and unrealized gain
(loss) on investments....... 2.31 (1.62) 2.02 2.96 (.01) 3.05 (.01) 2.87
------ ------ ----- ------- ------ ------- ------ ------
Total from Investment Operations.. 2.24 (1.66) 2.16 3.00 (.05) 3.11 (.01) 3.27
------ ------ ----- ------- ------ ------- ------ ------
DISTRIBUTIONS:
Dividends from investment income-net....... -- -- (.03) (.16) -- (.28) -- (.36)
Dividends in excess of investment
income-net................. -- (.09) -- -- -- -- -- --
Dividends from net realized
gain on investments.............. -- (2.29) (.54) (2.09) -- (2.09) -- (2.09)
------ ------ ----- ------- ------ ------- ------ ------
Total Distributions........ -- (2.38) (.57) (2.25) -- (2.37) -- (2.45)
------ ------ ----- ------- ------ ------- ------ ------
Net asset value, end of period........... $23.62 $19.58 $21.17 $21.92 $21.16 $21.90 $21.60 $22.42
====== ====== ===== ====== ======= ======= ====== ======
TOTAL INVESTMENT RETURN(3)........ 10.48%(4) (7.58%) 11.50% 15.05% (.24%)(4) 15.21% (.05%)(4) 16.17%
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to
average net assets............ 1.65%(4) 1.84% 1.97% 1.94% .36%(4) 1.94% .17%(4) .97%
Ratio of interest expense, loan commitment
fees and dividends on securities
sold short to average net assets......... .44%(4) .24% .05% -- -- -- -- --
Ratio of net investment income (loss) to
average net assets............. (.69%)(4) (.61%) .71% .19% (.18%)(4) (.51%) -- 1.07%
Portfolio Turnover Rate.......... 237.14% 199.13% 244.82% 147.64% 244.82% 147.64% 244.82% 147.64%
Average Commission Rate paid(5).......... -- -- -- $.1029 -- $.1029 -- $.1029
Net Assets, end of period
(000's omitted)........... $25,833 $40,86 $44,365 $44,152 $1 $6 $1 $4
</TABLE>
- --------------------------
(1) From January 15, 1993 (commencement of initial offering) to October 31,
1993.
(2) From September 1, 1995 (commencement of initial offering) to October 31,
1995.
(3) Exclusive of sales load.
(4) Not annualized.
(5) For fiscal years beginning November 1, 1995, the Fund is required to
disclose its average commission rate paid per share for purchases and sales
of investment securities.
PAGE 5
Further information about the Fund's performance is contained
in the Fund's annual report which may be obtained without charge by
writing to the address or calling the number set forth on the cover page
of this Prospectus.
<TABLE>
<CAPTION>
DEBT OUTSTANDING
YEAR ENDED OCTOBER 31,
-------------------------------------------------------------------------------
PER SHARE DATA: 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
------ ----- ----- ----- ---- ---- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Amount of debt outstanding at
end of year (in thousands)................ -- -- $18,350 $9,020 $23,994 $23,300 $35,100 __ -- --
Average amount of debt
outstanding throughout
year (in thousands)(2).................... $2,513 $6,145 $ 4,843 $10,388 $12,882 $ 5,102 $16,419 $11,097 -- --
Average number of shares
outstanding throughout
year (in thousands)(3)............... 5,193 7,102 6,161 5,807 6,244 10,058 12,321 14,337 -- --
Average amount of debt per share
throughout year................... $ .48 $ .87 $ .79 $ 1.79 $ .46 $ .51 $ 1.33 $ .77 -- --
- ------------
(1) Based upon daily outstanding borrowings.
(2) Based upon month-end balances.
</TABLE>
PAGE 6
ALTERNATIVE PURCHASE METHODS
The Fund offers you four methods of purchasing Fund shares.
Orders for purchases of Class R shares, however, may be placed only for
certain eligible investors as described below. If you are not eligible to
purchase Class R shares, you may choose from Class A, Class B and Class C
the Class of shares that best suits your needs, given the amount of your
purchase, the length of time you expect to hold your shares and any other
relevant circumstances. Each Fund share represents an identical pro rata
interest in the Fund's investment portfolio.
Class A shares are sold at net asset value per share plus a
maximum initial sales charge of 5.75% of the public offering price
imposed at the time of purchase. For shareholders beneficially owning
Class A shares on November 30, 1996, Class A shares are sold at net asset
value per share plus a maximum initial sales charge of 4.50% of the
public offering price imposed at the time of purchase. The initial sales
charge may be reduced or waived for certain purchases. See "How to Buy
Shares _ Class A Shares." These shares are subject to an annual service
fee at the rate of .25 of 1% of the value of the average daily net assets
of Class A. See "Distribution Plan and Shareholder Services Plan _
Shareholder Services Plan."
Class B shares are sold at net asset value per share with no
initial sales charge at the time of purchase; as a result, the entire
purchase price is immediately invested in the Fund. Class B shares are
subject to a maximum 4% contingent deferred sales charge ("CDSC"), which
is assessed only if you redeem Class B shares within six years of
purchase. See "How to Buy Shares _ Class B Shares" and "How to Redeem
Shares _Contingent Deferred Sales Charge _ Class B Shares." These shares
also are subject to an annual service fee at the rate of .25 of 1% of the
value of the average daily net assets of Class B. In addition, Class B
shares are subject to an annual distribution fee at the rate of .75 of 1%
of the value of the average daily net assets of Class B. See
"Distribution Plan and Shareholder Services Plan." The distribution fee
paid by Class B will cause such Class to have a higher expense ratio and
to pay lower dividends than Class A. Approximately six years after the
date of purchase, Class B shares automatically will convert to Class A
shares, based on the relative net asset values for shares of each such
Class, and will no longer be subject to the distribution fee. Class B
shares that have been acquired through the reinvestment of dividends and
distributions will be converted on a pro rata basis together with other
Class B shares, in the proportion that a shareholder's Class B shares
converting to Class A shares bears to the total Class B shares not
acquired through the reinvestment of dividends and distributions.
Class C shares are sold at net asset value per share with no
initial sales charge at the time of purchase; as a result, the entire
purchase price is immediately invested in the Fund. Class C shares are
subject to 1% CDSC, which is assessed only if you redeem such shares
within one year of their purchase. See "How to Buy Shares -- Class C
Shares" and "How to Redeem Shares -- Contingent Deferred Sales Charge --
Class C Shares." These shares also are subject to an annual service fee
at the rate of .25 of 1% of the value of the average daily net assets of
Class C and an annual distribution fee at the rate of .75 of 1% of the
value of the average daily net assets of Class C. See "Distribution
PAGE 7
Plan and Shareholder Services Plan." The distribution fee paid by Class C
will cause such Class to have a higher expense ratio and to pay lower
dividends than Class A.
Class R shares may not be purchased directly by individuals,
although eligible institutions may purchase Class R shares for accounts
maintained by individuals. Class R shares are sold at net asset value per
share only to institutional investors acting for themselves or in a
fiduciary, advisory, agency, custodial or similar capacity for qualified
or non-qualified employee benefit plans, including pension,
profit-sharing, SEP-IRAs and other deferred compensation plans, whether
established by corporations, partnerships, non-profit entities or state
and local governments, but not including IRAs or IRA "Rollover Accounts."
Class R shares are not subject to an annual service fee or distribution
fee.
The decision as to which Class of shares is more beneficial
to you depends on the amount and the intended length of your investment.
If you are not eligible to purchase Class R shares, you should consider
whether, during the anticipated life of your investment in the Fund, the
accumulated distribution fee and CDSC, if any, on Class B or Class C
shares would be less than the initial sales charge on Class A shares
purchased at the same time, and to what extent, if any, such differential
would be offset by the return of Class A. Additionally, investors
qualifying for reduced initial sales charges who expect to maintain their
investment for an extended period of time might consider purchasing Class
A shares because the accumulated distribution fees on Class B or Class C
shares may exceed the initial sales charge on Class A shares during the
life of the investment. Finally, you should consider the effect of the
CDSC and any conversion rights of the Classes in the context of your own
investment time frame. For example, while Class C shares have a shorter
CDSC period than Class B shares, Class C shares do not have a conversion
feature and, therefore, are subject to an ongoing distribution fee. Thus,
Class A and Class B shares may be more attractive than Class C shares to
investors with longer term investment outlooks. Generally, Class A shares
may be more appropriate for investors who invest $100,000 or more in Fund
shares.
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVE
The Fund's investment objective is to provide you with
capital growth. It cannot be changed without approval by the holders of a
majority (as defined in the Investment Company Act of 1940, as amended
(the "1940 Act")) of the Fund's outstanding voting shares. There can be
no assurance that the Fund's investment objective will be achieved.
MANAGEMENT POLICIES
The Fund invests primarily in equity securities of domestic
and foreign issuers which are characterized as "value" companies
according to criteria established by The Dreyfus Corporation. There are no
limitations on the type, size, operating history or dividend paying
record of companies or industries in which the Fund may invest, the
principal criteria for investment being that the securities provide
opportunities for capital growth. Equity securities consist of common
stocks, convertible securities and preferred stocks. The Fund may invest
up to 30% of the value of its assets in the securities of foreign
companies
PAGE 8
which are not publicly traded in the United States and the debt
securities of foreign governments. The Fund may invest in convertible
securities, preferred stocks and debt securities without limitation when
management believes that such securities offer opportunities for capital
growth. The debt securities in which the Fund may invest must be rated at
least Caa by Moody's Investors Service, Inc. ("Moody's") or CCC by
Standard & Poor's Ratings Group ("S&P") or, if unrated, deemed to be of
comparable quality by The Dreyfus Corporation. Debt securities rated Caa
by Moody's or CCC by S&P are considered to have predominantly speculative
characteristics with respect to capacity to pay interest and repay
principal and to be of poor standing. See "Investment Considerations and
Risks _ Lower Rated Securities" below for a discussion of certain risks.
In general, The Dreyfus Corporation believes that companies
with relatively low price to book ratios, low price to earnings ratios or
higher than average dividend payments in relation to price should be
classified as value companies. Alternatively, companies which have above
average earnings or sales growth and retention of earnings and command
higher price to earnings ratios fit the more classic growth description.
The Fund's policy is to purchase marketable securities which
are not restricted as to public sale, subject to the limited exception
set forth under "Appendix -- Certain Portfolio Securities _ Illiquid
Securities." The Fund will be alert to favorable arbitrage opportunities
resulting from special situations such as those arising from corporate
takeovers.
While seeking desirable investments, the Fund may invest in
money market instruments consisting of U.S. Government securities,
certificates of deposit, time deposits, bankers' acceptances, short-term
investment grade corporate bonds and other short-term debt instruments,
and repurchase agreements, as set forth under "Appendix -- Certain
Portfolio Securities -- Money Market Instruments." Under normal market
conditions, the Fund does not expect to have a substantial portion of its
assets invested in money market instruments. However, when The Dreyfus
Corporation determines that adverse market conditions exist, the Fund may
adopt a temporary defensive posture and invest all of its assets in money
market instruments.
In an effort to increase returns, the Fund expects to trade
actively and that the annual portfolio turnover rate could exceed 100%.
Higher portfolio turnover rates usually generate additional brokerage
commissions and expenses and the short-term gains realized from these
transactions are taxable to shareholders as ordinary income. In addition,
the Fund may engage in various investment techniques, such as leveraging,
short-selling, options and futures transactions, foreign currency
transactions and lending of portfolio securities. For a discussion of the
investment techniques and their related risks, see "Investment
Considerations and Risks" and "Appendix -- Investment Techniques" below
and "Investment Objective and Management Policies _ Management Policies"
in the Statement of Additional Information.
INVESTMENT CONSIDERATIONS AND RISKS
GENERAL -- The Fund's net asset value per share should be expected to
fluctuate. Investors should consider the Fund as a supplement to an
overall invest-
PAGE 9
ment program and should invest only if they are willing to
undertake the risks involved. See "Investment Objective and Management
Policies_Management Policies" in the Statement of Additional Information
for a further discussion of certain risks.
EQUITY SECURITIES -- Equity securities fluctuate in value, often
based on factors unrelated to the value of the issuer of the securities,
and such fluctuations can be pronounced. Changes in the value of the
Fund's investments will result in changes in the value of its shares and
thus the Fund's total return to investors.
The securities of the smaller companies in which the Fund may
invest may be subject to more abrupt or erratic market movements than
larger, more established companies, because these securities typically
are traded in lower volume and the issuers typically are subject to a
greater degree to changes in earnings and prospects.
FOREIGN SECURITIES -- Foreign securities markets generally are not as
developed or efficient as those in the United States. Securities of some
foreign issuers are less liquid and more volatile than securities of
comparable U.S. issuers. Similarly, volume and liquidity in most foreign
securities markets are less than in the United States and, at times,
volatility of price can be greater than in the United States.
Because evidences of ownership of such securities usually are
held outside the United States, the Fund will be subject to additional
risks which include possible adverse political and economic developments,
seizure or nationalization of foreign deposits and adoption of
governmental restrictions which might adversely affect or restrict the
payment of principal, interest and dividends on the foreign securities to
investors located outside the country of the issuer, whether from
currency blockage or otherwise.
Since foreign securities often are purchased with and payable
in currencies of foreign countries, the value of these assets as measured
in U.S. dollars may be affected favorably or unfavorably by changes in
currency rates and exchange control regulations.
FOREIGN CURRENCY TRANSACTIONS -- Currency exchange rates may
fluctuate significantly over short periods of time. They generally are
determined by the forces of supply and demand in the foreign exchange
markets and the relative merits of investments in different countries,
actual or perceived changes in interest rates and other complex factors,
as seen from an international perspective. Currency exchange rates also
can be affected unpredictably by intervention by U.S. or foreign
governments or central banks, or the failure to intervene, or by currency
controls or political developments in the United States or abroad. See
"Appendix _ Investment Techniques _ Foreign Currency Transactions."
FIXED-INCOME SECURITIES -- Even though interest-bearing securities
are investments which promise a stable stream of income, the prices of
such securities generally are inversely affected by changes in interest
rates and, therefore, are subject to the risk of market price
fluctuations. The values of fixed-income securities also may be affected
by changes in the credit rating or financial condition of the issuer.
Certain securities that may be purchased by the Fund, such as those rated
Baa or lower by Moody's and BBB or lower by S&P, may be subject to such
riskwith respect to the issuing entity and to greater market fluctuations
than certain lower yielding, higher rated fixed-income securities. Once
the rating of a
PAGE 10
portfolio security has been changed, the Fund will consider all
circumstances deemed relevant in determining whether to continue to hold
the security. See "Lower Rated Securities" and "Appendix
_ Certain Portfolio Securities _ Ratings" below and "Appendix" in the
Statement of Additional Information.
LOWER RATED SECURITIES -- The Fund may invest up to 35% of its net
assets in higher yielding (and, therefore, higher risk) debt securities
such as those rated Ba by Moody's or BB by S&P or as low as Caa by
Moody's or CCC by S&P (commonly known as junk bonds). They may be subject
to certain risks with respect to the issuing entity and to greater market
fluctuations than certain lower yielding, higher rated fixed-income
securities. The retail secondary market for these securities may be less
liquid than that of higher rated securities; adverse conditions could
make it difficult at times for the Fund to sell certain securities or
could result in lower prices than those used in calculating the Fund's
net asset value. See "Appendix _ Certain Portfolio Securities _ Ratings."
USE OF DERIVATIVES -- The Fund may invest in derivatives
("Derivatives"). These are financial instruments which derive their
performance, at least in part, from the performance of an underlying
asset, index, currency or interest rate. The Derivatives the Fund may use
include options and futures. While Derivatives can be used effectively in
furtherance of the Fund's investment objective, under certain market
conditions, they can increase the volatility of the Fund's net asset
value, can decrease the liquidity of the Fund's portfolio and make more
difficult the accurate pricing of the Fund's portfolio. See "Appendix _
Investment Techniques _ Use of Derivatives" below and "Investment
Objective and Management Policies _ Management Policies _ Derivatives" in
the Statement of Additional Information.
NON-DIVERSIFIED STATUS -- The classification of the Fund as a
"non-diversified" investment company means that the proportion of the
Fund's assets that may be invested in the securities of a single issuer
is not limited by the 1940 Act. A "diversified" investment company is
required by the 1940 Act generally, with respect to 75% of its total
assets, to invest not more than 5% of such assets in the securities of a
single issuer. Since a relatively high percentage of the Fund's assets may
be invested in the securities of a limited number of issuers, some of
which may be in the same industry, the Fund's portfolio may be more
sensitive to changes in the market value of a single issuer or industry.
However, to meet Federal tax requirements, at the close of each quarter
the Fund may not have more than 25% of its total assets invested in any
one issuer and, with respect to 50% of total assets, not more than 5% of
its total assets invested in any one issuer. These limitations do not
apply to U.S. Government securities.
SIMULTANEOUS INVESTMENTS -- Investment decisions for the Fund are
made independently from those of the other investment companies advised
by The Dreyfus Corporation. If, however, such other investment companies
desire to invest in, or dispose of, the same securities as the Fund,
available investments or opportunities for sales will be allocated
equitably to each investment company. In some cases, this procedure may
adversely affect the size of the position obtained for or disposed of by
the Fund or the price paid or received by the Fund.
MANAGEMENT OF THE FUND
INVESTMENT ADVISER -- The Dreyfus Corporation, located at 200 Park
Avenue, New York, New York 10166, was formed in 1947 and serves as the
Fund's
PAGE 11
investment adviser. The Dreyfus Corporation is a wholly-owned subsidiary
of Mellon Bank, N.A., which is a wholly-owned subsidiary of
Mellon Bank Corporation ("Mellon"). As of January 31, 1997, The Dreyfus
Corporation managed or administered approximately $85 billion in assets
for more than 1.7 million investor accounts nationwide.
The Dreyfus Corporation supervises and assists in the overall
management of the Fund's affairs under a Management Agreement with the
Fund, subject to the authority of the Fund's Board in accordance with
Massachusetts law. The Fund's primary portfolio manager is Timothy M.
Ghriskey. He has held that position since August 1995, and has been an
employee of The Dreyfus Corporation since July 1995. From 1985 to 1995,
Mr. Ghriskey was Vice President and Associate Managing Partner of Loomis,
Sayles & Company in New York. The Fund's other portfolio managers are
identified in the Statement of Additional Information. The Dreyfus
Corporation also provides research services for the Fund and for other
funds advised by The Dreyfus Corporation through a professional staff of
portfolio managers and securities analysts.
Mellon is a publicly owned multibank holding company
incorporated under Pennsylvania law in 1971 and registered under the
Federal Bank Holding Company Act of 1956, as amended. Mellon provides a
comprehensive range of financial products and services in domestic and
selected international markets. Mellon is among the twenty-five largest
bank holding companies in the United States based on total assets.
Mellon's principal wholly-owned subsidiaries are Mellon Bank, N.A.,
Mellon Bank (DE) National Association, Mellon Bank (MD), The Boston
Company, Inc., AFCO Credit Corporation and a number of companies known as
Mellon Financial Services Corporations. Through its subsidiaries,
including The Dreyfus Corporation, Mellon managed more than $233 billion
in assets as of December 31, 1996, including approximately $86 billion in
proprietary mutual fund assets. As of December 31, 1996, Mellon, through
various subsidiaries, provided non-investment services, such as custodial
and administration services, for more than $1,046 billion in assets,
including approximately $57 billion in mutual fund assets.
For the fiscal year ended October 31, 1996, the Fund paid The
Dreyfus Corporation a management fee at the annual rate of .75 of 1% of
the value of the Fund's average daily net assets. From time to time, The
Dreyfus Corporation may waive receipt of its fees and/or voluntarily
assume certain expenses of the Fund, which would have the effect of
lowering the Fund's expense ratio and increasing yield to investors. The
Fund will not pay The Dreyfus Corporation at a later time for any amounts
it may waive, nor will the Fund reimburse The Dreyfus Corporation for any
amounts it may assume.
In allocating brokerage transactions, The Dreyfus Corporation
seeks to obtain the best execution of orders at the most favorable net
price. Subject to this determination, The Dreyfus Corporation may
consider, among other things, the receipt of research services and/or the
sale of shares of the Fund or other funds managed, advised or
administered by The Dreyfus Corporation as factors in the selection of
broker-dealers to execute portfolio transactions for the Fund. See
"Portfolio Transactions" in the Statement of Additional Information.
PAGE 12
The Dreyfus Corporation may pay the Fund's distributor for
shareholder services from The Dreyfus Corporation's own assets, including
past profits but not including the management fee paid by the Fund. The
Fund's distributor may use part or all of such payments to pay Service
Agents in respect of these services.
DISTRIBUTOR -- The Fund's distributor is Premier Mutual Fund
Services, Inc. (the "Distributor"), located at 60 State Street, Boston,
Massachusetts 02109. The Distributor's ultimate parent is Boston
Institutional Group, Inc.
TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN -- Dreyfus
Transfer, Inc., a wholly-owned subsidiary of The Dreyfus Corporation,
P.O. Box 9671, Providence, Rhode Island 02940-9671, is the Fund's
Transfer and Dividend Disbursing Agent (the "Transfer Agent"). Mellon
Bank, N.A., One Mellon Bank Center, Pittsburgh, Pennsylvania 15258, is
the Fund's Custodian.
HOW TO BUY SHARES
GENERAL -- Class A shares, Class B shares and Class C shares may be
purchased only by clients of certain financial institutions (which may
include banks), securities dealers ("Selected Dealers") and other
industry professionals (collectively, "Service Agents"), except that
full-time or part-time employees of The Dreyfus Corporation or any of its
affiliates or subsidiaries, directors of The Dreyfus Corporation, Board
members of a fund advised by The Dreyfus Corporation, including members
of the Fund's Board, or the spouse or minor child of any of the foregoing
may purchase Class A shares directly through the Distributor. Subsequent
purchases may be sent directly to the Transfer Agent or your Service
Agent.
Class R shares are offered only to institutional investors
acting for themselves or in a fiduciary, advisory, agency, custodial or
similar capacity for qualified or non-qualified employee benefit plans,
including pension, profit-sharing, SEP-IRAs and other deferred
compensation plans, whether established by corporations, partnerships,
non-profit entities or state and local governments ("Retirement Plans").
The term "Retirement Plans" does not include IRAs or IRA "Rollover
Accounts." Class R shares may be purchased for a Retirement Plan only by
a custodian, trustee, investment manager or other entity authorized to
act on behalf of such Plan. Institutions effecting transactions in Class
R shares for the accounts of their clients may charge their clients direct
fees in connection with such transactions.
When purchasing Fund shares, you must specify which Class is
being purchased. Share certificates are issued only upon your written
request. No certificates are issued for fractional shares. The Fund
reserves the right to reject any purchase order.
Service Agents may receive different levels of compensation
for selling different Classes of shares. Management understands that some
Service Agents may impose certain conditions on their clients which are
different from those described in this Prospectus, and, to the extent
permitted by applicable regulatory authority, may charge their clients
direct fees. You should consult your Service Agent in this regard.
The minimum initial investment is $1,000. Subsequent
investments must be at least $100. However, the minimum initial
investment for Dreyfus-sponsored Keogh Plans, IRAs, SEP-IRAs and
403(b)(7) Plans with only one participant is
PAGE 13
$750, with no minimum on subsequent purchases. Individuals who open an
IRA also may open a non-working spousal IRA with a minimum initial
investment of $250. Subsequent investments in a spousal IRA must be at
least $250. The initial investment must be accompanied by the Account
Application. The Fund reserves the right to offer Fund shares without
regard to minimum purchase requirements to employees participating in
certain qualified and non-qualified employee benefit plans or other
programs where contributions or account information can be transmitted in
a manner and form acceptable to the Fund. The Fund reserves the right to
vary further the initial and subsequent investment minimum requirements
at any time.
The Internal Revenue Code of 1986, as amended (the "Code"),
imposes various limitations on the amount that may be contributed to
certain Retirement Plans. These limitations apply with respect to
participants at the plan level and, therefore, do not directly affect the
amount that may be invested in the Fund by a Retirement Plan.
Participants and plan sponsors should consult their tax advisers for
details.
You may purchase Fund shares by check or wire, or through the
TELETRANSFER Privilege described below. Checks should be made payable to
"Dreyfus Family of Funds," or, if for Dreyfus retirement plan accounts,
to "The Dreyfus Trust Company, Custodian." Payments which are mailed
should be sent to Dreyfus Premier Value Fund, P.O. Box 6587, Providence,
Rhode Island 02940-6587. If you are opening a new account, please enclose
your Account Application indicating which Class of shares is being
purchased. For subsequent investments, your Fund account number should
appear on the check and an investment slip should be enclosed. For
Dreyfus retirement plan accounts, payments which are mailed should be
sent to The Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence,
Rhode Island 02940-6427. Neither initial nor subsequent investments
should be made by third party check.
Wire payments may be made if your bank account is in a
commercial bank that is a member of the Federal Reserve System or any
other bank having a correspondent bank in New York City. Immediately
available funds may be transmitted by wire to The Bank of New York, DDA#
8900119365/Dreyfus Premier Value Fund. The wire must include your Fund
account number (for new accounts your Taxpayer Identification Number
("TIN") should be included instead), account registration and dealer
number, if applicable, and must indicate the Class of shares being
purchased. If your initial purchase of Fund shares is by wire, please
call your Service Agent, or 1-800-554-4611, after completing your wire
payment to obtain your Fund account number. Please include your Fund
account number on the Account Application and promptly mail the Account
Application to the Fund, as no redemptions will be permitted until the
Account Application is received. You may obtain further information about
remitting funds in this manner from your bank. All payments should be
made in U.S. dollars and, to avoid fees and delays, should be drawn only
on U.S. banks. A charge will be imposed if any check used for investment
in your account does not clear. The Fund makes available to certain large
institutions the ability to issue purchase instructions through
compatible computer facilities.
Fund shares also may be purchased through Dreyfus-AUTOMATIC
Asset BuilderRegistration Mark, the Government Direct Deposit Privilege
and the Payroll Savings
PAGE 14
Plan described under "Shareholder Services." These services enable you to
make regularly scheduled investments and may provide you with a convenient
way to invest for long-term financial goals. You should be aware, however,
that periodic investment plans do not guarantee a profit and will not
protect an investor against loss in a declining market.
Subsequent investments also may be made by electronic
transfer of funds from an account maintained in a bank or other domestic
financial institution that is an Automated Clearing House member. You
must direct the institution to transmit immediately available funds
through the Automated Clearing House to The Bank of New York with
instructions to credit your Fund account. The instructions must specify
your Fund account registration and your Fund account number PRECEDED BY
THE DIGITS "1111."
Fund shares are sold on a continuous basis. Net asset value
per share is determined as of the close of trading on the New York Stock
Exchange (currently 4:00 p.m., New York time), on each day the New York
Stock Exchange is open for business. For purposes of determining net
asset value, options and futures contracts will be valued 15 minutes
after the close of trading on the New York Stock Exchange. Net asset
value per share of each Class is computed by dividing the value of the
Fund's net assets represented by such Class (i.e., the value of its
assets less liabilities) by the total number of shares of such Class
outstanding. The Fund's investments are valued based on market value or,
where market quotations are not readily available, based on fair value as
determined in good faith by the Fund's Board. For further information
regarding the methods employed in valuing Fund investments, see
"Determination of Net Asset Value" in the Statement of Additional
Information.
If an order is received in proper form by the Transfer Agent
or other agent by the close of trading on the New York Stock Exchange
(currently 4:00 p.m., New York time) on a business day, Fund shares will
be purchased at the public offering price determined as of the close of
trading on the New York Stock Exchange on that day. Otherwise, Fund
shares will be purchased at the public offering price determined as of
the close of trading on the New York Stock Exchange on the next business
day, except where shares are purchased through a dealer as provided
below.
Orders for the purchase of Fund shares received by the close
of trading on the floor of the New York Stock Exchange on a business day
and transmitted to the Distributor or its designee by the close of its
business day (normally 5:15 p.m., New York time) will be based on the
public offering price per share determined as of the close of trading on
the New York Stock Exchange on that day. Otherwise, the orders will be
based on the next determined public offering price. It is the dealer's
responsibility to transmit orders so that they will be received by the
Distributor or its designee before the close of its business day. For
certain institutions that have entered into agreements with the
Distributor, payment for the purchase of Fund shares may be transmitted,
and must be received by the Transfer Agent, within three business days
after the order is placed. If such payment is not received within three
business days after the order is placed, the order may be canceled and
the institution could be held liable for resulting fees and/or losses.
PAGE 15
The Distributor may pay dealers a fee of up to .5% of the
amount invested through such dealers in Fund shares by employees
participating in qualified or non-qualified employee benefit plans or
other programs where (i) the employers or affiliated employers
maintaining such plans or programs have a minimum of 250 employees
eligible for participation in such plans or programs or (ii) such plan's
or program's aggregate investment in the Dreyfus Family of Funds or
certain other products made available by the Distributor to such plans or
programs exceeds $1,000,000 ("Eligible Benefit Plans"). Shares of funds
in the Dreyfus Family of Funds then held by Eligible Benefit Plans will
be aggregated to determine the fee payable. The Distributor reserves the
right to cease paying these fees at any time. The Distributor will pay
such fees from its own funds, other than amounts received from the Fund,
including past profits or any other source available to it.
Federal regulations require that you provide a certified TIN
upon opening or reopening an account. See "Dividends, Distributions and
Taxes" and the Account Application for further information concerning
this requirement. Failure to furnish a certified TIN to the Fund could
subject you to a $50 penalty imposed by the Internal Revenue Service
("IRS").
CLASS A SHARES -- The public offering price for Class A shares is the
net asset value per share of that Class plus, except for shareholders
beneficially owning Class A shares on November 30, 1996, a sales load as
shown below:
<TABLE>
<CAPTION>
TOTAL SALES LOAD
--------------------------------------
AS A % OF AS A % OF DEALERS' REALLOWANCE
OFFERING PRICE NET ASSET VALUE AS A % OF
AMOUNT OF TRANSACTION PER SHARE PER SHARE OFFERING PRICE
----------------------- ---------------- ---------------- --------------------------
<S> <C> <C> <C>
Less than $50,000......... 5.75 6.10 5.00
$50,000 to less than $100,000... 4.50 4.70 3.75
$100,000 to less than $250,000.... 3.50 3.60 2.75
$250,000 to less than $500,000... 2.50 2.60 2.25
$500,000 to less than $1,000,000.. 2.00 2.00 1.75
$1,000,000 or more........ -0- -0- -0-
For shareholders who beneficially owned Class A shares on
November 30, 1996, the public offering price for Class A shares is the
net asset value per share of that Class plus a sales load as shown below:
TOTAL SALES LOAD
--------------------------------------
AS A % OF AS A % OF DEALERS' REALLOWANCE
OFFERING PRICE NET ASSET VALUE AS A % OF
AMOUNT OF TRANSACTION PER SHARE PER SHARE OFFERING PRICE
----------------------- ---------------- ---------------- --------------------------
Less than $50,000......... 5.75 6.10 5.00
Less than $50,000......... 4.50 4.70 4.25
$50,000 to less than $100,000... 4.00 4.20 3.75
$100,000 to less than $250,000... 3.00 3.10 2.75
$250,000 to less than $500,000... 2.50 2.60 2.25
$500,000 to less than $1,000,000... 2.00 2.00 1.75
$1,000,000 or more........ -0- -0- -0-
</TABLE>
A CDSC of 1% will be assessed at the time of redemption of
Class A shares purchased without an initial sales charge as part of an
investment of at least $1,000,000 and redeemed within one year of
purchase. The Distributor may pay Service Agents an amount up to 1% of
the net asset value of Class A shares purchased by their clients that are
subject to a CDSC. The terms contained in
PAGE 16
the section of the Fund's Prospectus entitled "How to Redeem Shares _
Contingent Deferred Sales Charge" (other than the amount of the CDSC and
time periods) are applicable to the Class A shares subject to a CDSC.
Letter of Intent and Right of Accumulation apply to such purchases of
Class A shares.
Full-time employees of NASD member firms and full-time
employees of other financial institutions which have entered into an
agreement with the Distributor pertaining to the sale of Fund shares (or
which otherwise have a brokerage related or clearing arrangement with an
NASD member firm or financial institution with respect to the sale of
Fund shares) may purchase Class A shares for themselves, directly or
pursuant to an employee benefit plan or other program, or for their
spouses and minor children at net asset value, provided that they have
furnished the Distributor with such information that it may request from
time to time in order to verify eligibility for this privilege. This
privilege also applies to full-time employees of financial institutions
affiliated with NASD member firms whose full-time employees are eligible
to purchase Class A shares at net asset value. In addition, Class A shares
are offered at net asset value to full-time or part-time employees of The
Dreyfus Corporation or any of its affiliates or subsidiaries, directors
of The Dreyfus Corporation, Board members of a fund advised by The
Dreyfus Corporation, including members of the Fund's Board, or the spouse
or minor child of any of the foregoing.
Class A shares are offered at net asset value without a sales
load to employees participating in Eligible Benefit Plans. Class A shares
also may be purchased (including by exchange) at net asset value without
a sales load for Dreyfus-sponsored IRA "Rollover Accounts" with the
distribution proceeds from a qualified retirement plan or a
Dreyfus-sponsored 403(b)(7) plan, provided that, at the time of such
distribution, such qualified retirement plan or Dreyfus-sponsored
403(b)(7) plan (a) met the requirements of an Eligible Benefit Plan and
all or a portion of such plan's assets were invested in funds in the
Dreyfus Premier Family of Funds or the Dreyfus Family of Funds or certain
other products made available by the Distributor to such plans, or (b)
invested all of its assets in certain funds in the Dreyfus Premier Family
of Funds or the Dreyfus Family of Funds or certain other products made
available by the Distributor to such plans.
Class A shares may be purchased at net asset value through
certain broker-dealers and other financial institutions which have
entered into an agreement with the Distributor, which includes a
requirement that such shares be sold for the benefit of clients
participating in a "wrap-account" or a similar program under which such
clients pay a fee to such broker-dealer or other financial institution.
Class A shares also may be purchased at net asset value,
subject to appropriate documentation, through a broker-dealer or other
financial institution with the proceeds from the redemption of shares of
a registered open-end management investment company not managed by The
Dreyfus Corporation or its affiliates. The purchase of Class A shares of
the Fund must be made within 60 days of such redemption and the
shareholder must have either (i) paid an initial sales charge or a
contingent deferred sales charge or (ii) been obligated to pay at any
time during the holding period, but did not actually pay on redemption, a
deferred sales charge with respect to such redeemed shares.
Class A shares also may be purchased at net asset value,
subject to appropriate documentation, by (i) qualified separate accounts
maintained by an insurance company pursuant to the laws of any State or
territory of the United
PAGE 17
States, (ii) a State, county or city or instrumentality thereof, (iii) a
charitable organization (as defined in Section 501 (c)(3) of the Code)
investing $50,000 or more in Fund shares, and (iv) a charitable remainder
trust (as defined in Section 501(c)(3) of the Code).
The dealer reallowance may be changed from time to time but
will remain the same for all dealers. The Distributor, at its expense,
may provide additional promotional incentives to dealers that sell shares
of funds advised by The Dreyfus Corporation which are sold with a sales
load, such as the Fund. In some instances, these incentives may be
offered only to certain dealers who have sold or may sell significant
amounts of shares.
CLASS B SHARES -- The public offering price for Class B shares is the
net asset value per share of that Class. No initial sales charge is
imposed at the time of purchase. A CDSC is imposed, however, on certain
redemptions of Class B shares as described under "How to Redeem Shares."
The Distributor compensates certain Service Agents for selling Class B
and Class C shares at the time of purchase from the Distributor's own
assets. The proceeds of the CDSC and the distribution fee, in part, are
used to defray these expenses.
CLASS C SHARES -- The public offering price for Class C shares is the
net asset value per share of that Class. No initial sales charge is
imposed at the time of purchase. A CDSC is imposed, however, on
redemptions of Class C shares made within the first year of purchase. See
"Class B Shares"above and "How to Redeem Shares."
CLASS R SHARES -- The public offering price for Class R shares is the
net asset value per share of that Class.
RIGHT OF ACCUMULATION -- CLASS A SHARES -- Reduced sales loads may
apply to any purchase of Class A shares, shares of other funds in the
Dreyfus Premier Family of Funds, shares of certain other funds advised by
The Dreyfus Corporation which are sold with a sales load and shares
acquired by a previous exchange of such shares (hereinafter referred to
as "Eligible Funds"), by you and any related "purchaser" as defined in
the Statement of Additional Information, where the aggregate investment,
including such purchase, is $50,000 or more. If, for example, you
previously purchased and still hold Class A shares of the Fund, or of any
other Eligible Fund, or combination thereof, with an aggregate current
market value of $40,000 and subsequently purchase Class A shares of the
Fund having a current value of $20,000, the sales load applicable to the
subsequent purchase would be reduced to 4.5% of the offering price. All
present holdings of Eligible Funds may be combined to determine the
current offering price of the aggregate investment in ascertaining the
sales load applicable to each subsequent purchase. Class A Shares
purchased by Shareholders beneficially owning Class A shares on November
30, 1996 are subject to a different sales load schedule, as described
above under "Class A Shares."
To qualify for reduced sales loads, at the time of a purchase
you or your Service Agent must notify theDistributor if orders are made
by wire, or the Transfer Agent if orders are made by mail. The reduced
sales load is subject to confirmation of your holdings through a check of
appropriate records.
TELETRANSFER PRIVILEGE -- You may purchase shares (minimum $500,
maximum $150,000 per day) by telephone if you have checked the
appropriate box and supplied the necessary information on the Account
Application or have filed a
PAGE 18
Shareholder Services Form with the Transfer Agent. The proceeds will be
transferred between the bank account designated in one of these documents
and your Fund account. Only such a bank account maintained in a domestic
financial institution which is an Automated Clearing House member may be
so designated. The Fund may modify or terminate this Privilege at any
time or charge a service fee upon notice to shareholders. No such fee
currently is contemplated.
If you have selected the TELETRANSFER Privilege, you may
request a TELETRANSFER purchase of shares by calling your Service Agent,
or 1-800-221-4060 or, if you are calling from overseas, call 401-455-3306.
SHAREHOLDER SERVICES
The services and privileges described under this heading may
not be available to clients of certain Service Agents and some Service
Agents may impose certain conditions on their clients which are different
from those described in this Prospectus. You should consult your Service
Agent in this regard.
FUND EXCHANGES -- You may purchase, in exchange for shares of a
Class, shares of the same Class of certain other funds managed or
administered by The Dreyfus Corporation, to the extent such shares are
offered for sale in your state of residence. These Funds may have
different investment objectives which may be of interest to you. You also
may exchange your Fund shares that are subject to a CDSC for shares of
Dreyfus Worldwide Dollar Money Market Fund, Inc. The shares so purchased
will be held in a special account created solely for this purpose
("Exchange Account"). Exchanges of shares from an Exchange Account only
can be made into certain other funds managed or administered by The
Dreyfus Corporation. No CDSC is charged when an investor exchanges into
an Exchange Account; however, the applicable CDSC will be imposed when
shares are redeemed from an Exchange Account or other applicable fund
account. Upon redemption, the applicable CDSC will be calculated without
regard to the time such shares were held in an Exchange Account. See "How
to Redeem Shares." Redemption proceeds for Exchange Account shares are
paid by Federal wire or check only. Exchange Account shares also are
eligible for the Auto-Exchange Privilege, Dividend Sweep and the
Automatic Withdrawal Plan. To use this service, you should consult your
Service Agent, or call 1-800-554-4611, to determine if it is available
and whether any conditions are imposed on its use. WITH RESPECT TO CLASS R
SHARES HELD BY RETIREMENT PLANS, EXCHANGES MAY BE MADE ONLY BETWEEN A
SHAREHOLDER'S RETIREMENT PLAN ACCOUNT IN ONE FUND AND SUCH SHAREHOLDER'S
RETIREMENT PLAN ACCOUNT IN ANOTHER FUND.
To request an exchange, your Service Agent acting on your
behalf must give exchange instructions to the Transfer Agent in writing
or by telephone. Before any exchange, you must obtain and should review a
copy of the current prospectus of the fund into which the exchange is
being made. Prospectuses may be obtained by calling your Service Agent,
or 1-800-554-4611. Except in cases of personal retirement plans, shares
being exchanged must have a current value of at least $500; furthermore,
when establishing a new account by exchange, the shares being exchanged
must have a value of at least the minimum initial investment required for
the fund into which the exchange is being made. The ability to issue
exchange instructions by telephone is given to all fund shareholders
automatically, unless you check the applicable "No" box on
PAGE 19
the Account Application indicating that you specifically refuse this
Privilege. The Telephone Exchange Privilege may be established for an
existing account by written request signed by all shareholders on the
account, by a separate signed Shareholder Services Form, available by
calling your Service Agent, or 1-800-554-4611 or by oral request from any
of the authorized signatories on the account by calling your Service Agent,
or 1-800-554-4611. If you have established the Telephone Exchange Privilege,
you may telephone exchange instructions (including over The Dreyfus
TouchRegistration Mark automated telephone system) by calling
1-800-645-6561. If you are calling from overseas, call 516-794-5452. See
"How to Redeem Shares _ Procedures." Upon an exchange into a new account,
the following shareholder services and privileges, as applicable and where
available, will be automatically carried over to the fund into which the
exchange is made: Telephone Exchange Privilege, Wire Redemption Privilege,
Telephone Redemption Privilege, TELETRANSFER Privilege and the
dividend/capital gain distribution option (except for Dividend Sweep)
selected by the investor.
Shares will be exchanged at the next determined net asset
value; however, a sales load may be charged with respect to exchanges of
Class A shares into funds sold with a sales load. No CDSC will be imposed
on Class B or Class C shares at the time of an exchange; however, Class B
or Class C shares acquired through an exchange will be subject on
redemption to the higher CDSC applicable to the exchanged or acquired
shares. The CDSC applicable on redemption of the acquired Class B or
Class C shares will be calculated from the date of the initial purchase
of the Class B or Class C shares exchanged. If you are exchanging Class A
shares into a fund that charges a sales load, you may qualify for share
prices which do not include the sales load or which reflect a reduced
sales load, if the shares you are exchanging were: (a) purchased with a
sales load, (b) acquired by a previous exchange from shares purchased
with a sales load, or (c) acquired through reinvestments of dividends or
distributions paid with respect to the foregoing categories of shares. To
qualify, at the time of the exchange your Service Agent must notify the
Distributor. Any such qualification is subject to confirmation of your
holdings through a check of appropriate records. See "Shareholder
Services" in the Statement of Additional Information. No fees currently
are charged shareholders directly in connection with exchanges, although
the Fund reserves the right, upon not less than 60 days' written notice,
to charge shareholders a nominal administrative fee in accordance with
rules promulgated by the Securities and Exchange Commission. The Fund
reserves the right to reject any exchange request in whole or in part.
The availability of Fund Exchanges may be modified or terminated at any
time upon notice to shareholders. See "Dividends, Distributions and
Taxes."
AUTO-EXCHANGE PRIVILEGE -- Auto-Exchange Privilege permits you to
invest regularly (on a semi-monthly, monthly, quarterly or annual basis),
in exchange for shares of the Fund, in shares of the same Class of other
funds in the Dreyfus Premier Family of Funds or certain other funds in
the Dreyfus Family of Funds of which you are currently a shareholder. WITH
RESPECT TO CLASS R SHARES HELD BY RETIREMENT PLANS, EXCHANGES PURSUANT TO
THE AUTO-EXCHANGE PRIVILEGE MAY BE MADE ONLY BETWEEN A SHAREHOLDER'S
RETIREMENT PLAN ACCOUNT IN ONE FUND AND SUCH SHAREHOLDER'S RETIREMENT
PLAN ACCOUNT IN ANOTHER FUND. The amount you designate, which can be
expressed either in terms of a specific dol-
PAGE 20
lar or share amount ($100 minimum), will be exchanged automatically on the
first and or fifteenth of the month according to the schedule you have
selected. Shares will be exchanged at the then-current net asset value;
however, a sales load may be charged with respect to exchanges of Class A
shares into funds sold with a sales load. No CDSC will be imposed on
Class B or Class C shares at the time of an exchange; however, Class B or
Class C shares acquired through an exchange will be subject on redemption
to the higher CDSC applicable to the exchanged or acquired shares. The
CDSC applicable on redemption of the acquired Class B or Class C shares
will be calculated from the date of the initial purchase of the Class B or
Class C shares exchanged. See "Shareholder Services" in the Statement of
Additional Information. This Privilege may be modified or canceled by the
Fund or the Transfer Agent. You may modify or cancel your exercise of this
Privilege at any time by mailing written notification to Dreyfus Premier
Value Fund, P.O. Box 6587, Providence, Rhode Island 02940-6587. The Fund
may charge a service fee for this Privilege. No such fee currently is
contemplated. For more information concerning this Privilege and the funds
in the Dreyfus Family of Funds eligible to participate in this Privilege,
or to obtain a Auto-Exchange Authorization Form, please call toll free
1-800-645-6561. See "Dividends, Distributions and Taxes."
DREYFUS-AUTOMATIC ASSET BUILDERRegistration Mark -- Dreyfus-AUTOMATIC
Asset Builder permits you to purchase Fund shares (minimum of $100 and
maximum of $150,000 per transaction) at regular intervals selected by
you. Fund shares are purchased by transferring funds from the bank
account designated by you. At your option, the bank account designated by
you will be debited in the specified amount, and Fund shares will be
purchased, once a month, on either the first or fifteenth day, or twice a
month, on both days. Only an account maintained at a domestic financial
institution which is an Automated Clearing House member may be so
designated. To establish a Dreyfus-AUTOMATIC Asset Builder account, you
must file an authorization form with the Transfer Agent. You may obtain
the necessary authorization form by calling your Service Agent, or
1-800-554-4611. You may cancel your participation in this Privilege or
change the amount of purchase at any time by mailing written notification
to Dreyfus Premier Value Fund, P.O. Box 6587, Providence, Rhode Island
02940-6587, or, if for Dreyfus Retirement Plan accounts, to The Dreyfus
Trust Company, Custodian, P.O. Box 6427, Providence, Rhode Island
02940-6427, and the notification will be effective three business days
following receipt. The Fund may modify or terminate this Privilege at any
time or charge a service fee. No such fee currently is contemplated.
GOVERNMENT DIRECT DEPOSIT PRIVILEGE -- The Government Direct Deposit
Privilege enables you to purchase Fund shares (minimum of $100 and
maximum of $50,000 per transaction) by having Federal salary, Social
Security, or certain veterans', military or other payments from the
Federal government automatically deposited into your Fund account. You
may deposit as much of such payments as you elect. To enroll in
Government Direct Deposit, you must file with the Transfer Agent a
completed Direct Deposit Sign-Up Form for each type of payment that you
desire to include in this Privilege. The appropriate form may be obtained
by calling your Service Agent, or 1-800-554-4611. Death or legal
incapacity will terminate your participation in this Privilege. You may
elect at any time to terminate
PAGE 21
your participation by notifying in writing the appropriate Federal agency.
Further, the Fund may terminate your participation upon 30 days' notice
to you.
PAYROLL SAVINGS PLAN -- The Payroll Savings Plan permits you to
purchase Fund shares (minimum of $100 per transaction) automatically on a
regular basis. Depending upon your employer's direct deposit program, you
may have part or all of your paycheck transferred to your existing
Dreyfus account electronically through the Automated Clearing House
system at each pay period. To establish a Dreyfus Payroll Savings Plan
account, you must file an authorization form with your employer's payroll
department. Your employer must complete the reverse side of the form and
return it to Dreyfus Premier Value Fund, P.O. Box 6587, Providence, Rhode
Island 02940-6587. You may obtain the necessary authorization form by
calling your Service Agent, or 1-800-554-4611. You may change the amount
of purchase or cancel the authorization only by written notification to
your employer. It is the sole responsibility of your employer, not the
Distributor, The Dreyfus Corporation, the Fund, the Transfer Agent or any
other person, to arrange for transactions under the Payroll Savings Plan.
The Fund may modify or terminate this Privilege at any time or charge a
service fee. No such fee currently is contemplated.
DIVIDEND OPTIONS -- Dividend Sweep enables you to invest
automatically dividends or dividends and capital gain distributions, if
any, paid by the Fund in shares of the same Class of another fund in the
Dreyfus Premier Family of Funds or the Dreyfus Family of Funds of which
you are a shareholder. Shares of the other fund will be purchased at the
then-current net asset value; however, a sales load may be charged with
respect to investments in shares of a fund sold with a sales load. If you
are investing in a fund that charges a sales load, you may qualify for
share prices which do not include the sales load or which reflect a
reduced sales load. If you are investing in a fund or class that charges
a CDSC, the shares purchased will be subject on redemption to the CDSC,
if any, applicable to the purchased shares. See "Shareholder Services" in
the Statement of Additional Information. Dividend ACH permits you to
transfer electronically dividends or dividends and capital gain
distributions, if any, from the Fund to a designated bank account. Only
an account maintained at a domestic financial institution which is an
Automated Clearing House member may be so designated. Banks may charge a
fee for this service.
For more information concerning these privileges or to
request a Dividend Options Form, please call your Service Agent, or
1-800-554-4611. You may cancel these privileges by mailing written
notification to Dreyfus Premier Value Fund, P.O. Box 6587, Providence,
Rhode Island 02940-6587. To select a new fund after cancellation, you
must submit a new authorization form. Enrollment in or cancellation of
these privileges is effective three business days following receipt.
These privileges are available only for existing accounts and may not be
used to open new accounts. Minimum subsequent investments do not apply to
Dividend Sweep. The Fund may modify or terminate these privileges at any
time or charge a service fee. No such fee currently is contemplated.
Shares held under Keogh Plans, IRAs or other retirement plans are not
eligible for Dividend Sweep.
AUTOMATIC WITHDRAWAL PLAN -- The Automatic Withdrawal Plan permits
you to request withdrawal of a specified dollar amount (minimum of $50)
on either a monthly or quarterly basis if you have a $5,000 minimum
account.
PAGE 22
Particular Retirement Plans, including Dreyfus sponsored retirement plans,
may permit certain participants to establish an automatic
withdrawal plan from such Retirement Plans. Participants should consult
their Retirement Plan sponsor and tax adviser for details. Such a
withdrawal plan is different than the Automatic Withdrawal Plan. An
application for the Automatic Withdrawal Plan can be obtained by calling
your Service Agent, or 1-800-554-4611. The Automatic Withdrawal Plan may
be ended at any time by you, the Fund or the Transfer Agent. Shares for
which certificates have been issued may not be redeemed through the
Automatic Withdrawal Plan.
No CDSC with respect to Class B shares will be imposed on
withdrawals made under the Automatic Withdrawal Plan, provided that the
amounts withdrawn under the plan do not exceed on an annual basis 12% of
the account value at the time the shareholder elects to participate in
the Automatic Withdrawal Plan. Withdrawals with respect to Class B shares
under the Automatic Withdrawal Plan that exceed on an annual basis 12% of
the value of the shareholder's account will be subject to a CDSC on the
amounts exceeding 12% of the initial account value. Class C shares
withdrawn pursuant to the Automatic Withdrawal Plan will be subject to
any applicable CDSC. Purchases of additional Class A shares where the
sales load is imposed concurrently with withdrawals of Class A shares
generally are undesirable.
RETIREMENT PLANS -- The Fund offers a variety of pension and
profit-sharing plans, including Keogh Plans, IRAs, SEP-IRAs and IRA
"Rollover Accounts," 401(k) Salary Reduction Plans and 403(b)(7) Plans.
Plan support services also are available. You can obtain details on the
various plans by calling the following numbers toll free: for Keogh
Plans, please call 1-800-358-5566; for IRAs and IRA "Rollover Accounts,"
please call 1-800-645-6561; or for SEP-IRAs, 401(k) Salary Reduction
Plans and 403(b)(7) Plans, please call 1-800-322-7880.
LETTER OF INTENT -- Class A Shares -- By signing a Letter of Intent
form, available by calling your Service Agent, or 1-800-554-4611, you
become eligible for the reduced sales load applicable to the total number
of Eligible Fund shares purchased in a 13-month period pursuant to the
terms and under the conditions set forth in the Letter of Intent. A
minimum initial purchase of $5,000 is required. To compute the applicable
sales load, the offering price of shares you hold (on the date of
submission of the Letter of Intent) in any Eligible Fund that may be used
toward "Right of Accumulation" benefits described above may be used as a
credit toward completion of the Letter of Intent. However, the reduced
sales load will be applied only to new purchases.
The Transfer Agent will hold in escrow 5% of the amount
indicated in the Letter of Intent for payment of a higher sales load if
you do not purchase the full amount indicated in the Letter of Intent.
The escrow will be released when you fulfill the terms of the Letter of
Intent by purchasing the specified amount. If your purchases qualify for
a further sales load reduction, the sales load will be adjusted to
reflect your total purchase at the end of 13 months. If total purchases
are less than the amount specified, you will be requested to remit an
amount equal to the difference between the sales load actually paid and
the sales load applicable to the aggregate purchases actually made. If
such remittance is not received within 20 days, the Transfer Agent, as
attorney-in-fact pursuant to the terms of the Letter of Intent, will
redeem an appropriate number of Class A shares held in escrow to
PAGE 23
realize the difference. Signing a Letter of Intent does not bind you to
purchase, or the Fund to sell, the full amount indicated at the sales
load in effect at the time of signing, but you must complete the intended
purchase to obtain the reduced sales load. At the time you purchase Class
A shares, you must indicate your intention to do so under a Letter of
Intent. Purchases made pursuant to a Letter of Intent will be made at the
then-current net asset value plus the applicable sales load in effect at
the time such Letter of Intent was executed.
HOW TO REDEEM SHARES
GENERAL
You may request redemption of your shares at any time.
Redemption requests should be transmitted to the Transfer Agent as
described below. When a request is received in proper form, the Fund will
redeem the shares at the next determined net asset value as described
below. If you hold Fund shares of more than one Class, any request for
redemption must specify the Class of shares being redeemed. If you fail
to specify the Class of shares to be redeemed or if you own fewer shares
of the Class than specified to be redeemed, the redemption request may be
delayed until the Transfer Agent receives further instructions from you
or your Service Agent.
The Fund imposes no charges (other than any applicable CDSC)
when shares are redeemed. Service Agents may charge their clients a fee
for effecting redemptions of Fund shares. Any certificates representing
Fund shares being redeemed must be submitted with the redemption request.
The value of the shares redeemed may be more or less than their original
cost, depending on the Fund's then-current net asset value.
Distributions from qualified Retirement Plans, IRAs
(including IRA "Rollover Accounts") and certain non-qualified deferred
compensation plans, except distributions representing returns of
non-deductible contributions to the Retirement Plan or IRA, generally are
taxable income to the participant. Distributions from such a Retirement
Plan or IRA to a participant prior to the time the participant reaches
age 591\2 or becomes permanently disabled may subject the participant to
an additional 10% penalty tax imposed by the IRS. Participants should
consult their tax advisers concerning the timing and consequences of
distributions from a Retirement Plan. Participants in qualified
Retirement Plans will receive a disclosure statement describing the
consequences of a distribution from such a Plan from the administrator,
trustee or custodian of the Plan, before receiving the distribution. The
Fund will not report to the IRS redemptions of Fund shares by qualified
Retirement Plans, IRAs or certain non-qualified deferred compensation
plans. The administrator, trustee or custodian of such Retirement Plans
and IRAs will be responsible for reporting distributions from such Plans
and IRAs to the IRS.
The Fund ordinarily will make payment for all shares redeemed
within seven days after receipt by the Transfer Agent of a redemption
request in proper form, except as provided by the rules of the Securities
and Exchange Commission. HOWEVER, IF YOU HAVE PURCHASED FUND SHARES BY
CHECK, BY TELETRANSFER OR THROUGH DREYFUS-AUTOMATIC ASSET
BUILDERRegistration Mark AND SUBSEQUENTLY SUBMIT A WRITTEN REDEMPTION
REQUEST TO THE TRANSFER AGENT, THE REDEMPTION PROCEEDS WILL BE TRANSMITTED
TO YOU PROMPTLY UPON BANK CLEARANCE OF YOUR PUR-
PAGE 24
CHASE CHECK, TELETRANSFER PURCHASE OR DREYFUS-AUTOMATIC ASSET
BUILDERRegistration Mark ORDER, WHICH MAY TAKE UP
TO EIGHT BUSINESS DAYS OR MORE. IN ADDITION, THE FUND WILL REJECT REQUESTS
TO REDEEM SHARES BY WIRE OR TELEPHONE OR PURSUANT TO THE TELETRANSFER
PRIVILEGE FOR A PERIOD OF EIGHT BUSINESS DAYS AFTER RECEIPT BY THE
TRANSFER AGENT OF THE PURCHASE CHECK, THE TELETRANSFER PURCHASE OR
DREYFUS-AUTOMATIC ASSET BUILDER ORDER AGAINST WHICH SUCH REDEMPTION IS
REQUESTED. THESE PROCEDURES WILL NOT APPLY IF YOUR SHARES WERE PURCHASED
BY WIRE PAYMENT, OR IF YOU OTHERWISE HAVE A SUFFICIENT COLLECTED BALANCE
IN YOUR ACCOUNT TO COVER THE REDEMPTION REQUEST. PRIOR TO THE TIME ANY
REDEMPTION IS EFFECTIVE, DIVIDENDS ON SUCH SHARES WILL ACCRUE AND BE
PAYABLE, AND YOU WILL BE ENTITLED TO EXERCISE ALL OTHER RIGHTS OF
BENEFICIAL OWNERSHIP. Fund shares will not be redeemed until the
Transfer Agent has received your Account Application.
The Fund reserves the right to redeem your account at its
option upon not less than 30 days' written notice if your account's net
asset value is $500 or less and remains so during the notice period.
CONTINGENT DEFERRED SALES CHARGE
CLASS B SHARES -- A CDSC payable to the Distributor is imposed on any
redemption by a shareholder of Class B shares which reduces the current
net asset value of your Class B shares to an amount which is lower than
the dollar amount of all payments by you for the purchase of Class B
shares of the Fund held by you at the time of redemption. No CDSC will be
imposed to the extent that the net asset value of the Class B shares
redeemed does not exceed (i) the current net asset value of Class B
shares acquired through reinvestment of dividends or capital gain
distributions, plus (ii) increases in the net asset value of your Class B
shares above the dollar amount of all your payments for the purchase of
Class B shares of the Fund held by you at the time of redemption.
If the aggregate value of the Class B shares redeemed has
declined below their original cost as a result of the Fund's performance,
a CDSC may be applied to the then-current net asset value rather than the
purchase price.
In circumstances where the CDSC is imposed, the amount of the
charge will depend on the number of years from the time you purchased the
Class B shares until the time of redemption of such shares. Solely for
purposes of determining the number of years from the time of any payment
for the purchase of Class B shares, all payments during a month will be
aggregated and deemed to have been made on the first day of the month.
The following table sets forth the rates of the CDSC for
Class B shares, except as set forth below:
<TABLE>
<CAPTION>
YEAR SINCE PURCHASE CDSC AS A % OF AMOUNT
PAYMENT WAS MADE INVESTED OR REDEMPTION PROCEEDS
----------------------- ---------------------------------------
<S> <C>
First.................................... 4.00
Second................................... 4.00
Third.................................... 3.00
Fourth................................... 3.00
Fifth.................................... 2.00
Sixth.................................... 1.00
PAGE 25
The following table sets forth the rates of the CDSC for
Class B shares purchased by shareholders who beneficially owned Class B
shares on November 30, 1996:
YEAR SINCE PURCHASE CDSC AS A % OF AMOUNT
PAYMENT WAS MADE INVESTED OR REDEMPTION PROCEEDS
----------------------- ---------------------------------------
First.................................... 3.00
Second................................... 3.00
Third.................................... 2.00
Fourth................................... 2.00
Fifth.................................... 1.00
Sixth.................................... 0.00
</TABLE>
For example, assume an investor purchased 100 shares at $10
per share for a cost of $1,000. Subsequently, the shareholder acquired 5
additional shares through dividend reinvestment. During the second year
after the purchase the investor decided to redeem $500 of his or her
investment. Assuming at the time of the redemption the net asset value
had appreciated to $12 per share, the value of the investor's shares would
be $1,260 (105 shares at $12 per share). The CDSC would not be applied to
the value of the reinvested dividend shares and the amount which
represents appreciation ($260). Therefore, $240 of the
$500 redemption proceeds ($500 minus $260) would be charged at a rate of
4% (the applicable rate on the second year after purchase for purchases
made after November 30, 1996) for a total CDSC of $9.60.
CLASS C SHARES -- A CDSC of 1% payable to the Distributor is imposed
on any redemption of Class C shares within one year of the date of
purchase. The basis for calculating the payment of any such CDSC will be
the method used in calculating the CDSC for Class B shares. See
"Contingent Deferred Sales Charge _ Class B Shares" above.
WAIVER OF CDSC -- The CDSC applicable to Class B and Class C shares
may be waived in connection with (a) redemptions made within one year
after the death or disability, as defined in Section 72(m)(7) of the
Code, of the shareholder, (b) redemptions by employees participating in
Eligible Benefit Plans, (c) redemptions as a result of a combination of
any investment company with the Fund by merger, acquisition of assets or
otherwise, (d) a distribution following retirement under a tax-deferred
retirement plan or upon attaining age 70 1\2 in the case of an IRA or
Keogh plan or custodial account pursuant to Section 403(b) of the Code,
and (e) redemptions pursuant to the Automatic Withdrawal Plan, as
described in the Fund's prospectus. If the Fund's Board determines to
discontinue the waiver of the CDSC, the disclosure in the Fund's
Prospectus will be appropriately revised. Any Fund shares subject to a
CDSC which were purchased prior to the termination of such waiver will
have the CDSC waived as provided in the Fund's Prospectus at the time of
the purchase of such shares.
To qualify for a waiver of the CDSC, at the time of
redemption you must notify the Transfer Agent or your Service Agent must
notify the Distributor. Any such qualification is subject to confirmation
of your entitlement.
PROCEDURES
You may redeem shares by using the regular redemption
procedure through the Transfer Agent, or, if you have checked the
appropriate box and supplied the necessary information on the Account
Application or have filed a Shareholder Services Form with the Transfer
Agent, through the Wire
PAGE 26
Redemption Privilege, the Telephone Redemption Privilege or the
TELETRANSFER Privilege. If you are a client of a Selected Dealer, you may
redeem shares through the Selected Dealer. Other redemption procedures may
be in effect for clients of certain Service Agents or institutions. The
Fund makes available to certain large institutions the ability to issue
redemption instructions through compatible computer facilities. The Fund
reserves the right to refuse any request made by wire or telephone,
including requests made shortly after a change of address, and may
limit the amount involved or the number of such requests. The Fund may
modify or terminate any redemption Privilege at any time or charge a
service fee upon notice to shareholders. No such fee currently is
contemplated. Shares held under Keogh Plans, IRAs or other
retirement plans, and shares for which certificates have been issued, are
not eligible for the Wire Redemption, Telephone Redemption or TELETRANSFER
Privilege.
You may redeem shares by telephone if you have checked the
appropriate box on the Account Application or have filed a Shareholder
Services Form with the Transfer Agent. If you select a telephone
redemption privilege or telephone exchange privilege (which is granted
automatically unless you refuse it), you authorize the Transfer Agent to
act on telephone instructions (including over The Dreyfus
TouchRegistration Mark automated telephone system) from any person
representing himself or herself to be you, or a representative of your
Service Agent, and reasonably believed by the Transfer Agent to be
genuine. The Fund will require the Transfer Agent to employ reasonable
procedures, such as requiring a form of personal identification, to
confirm that instructions are genuine and, if it does not follow such
procedures, the Fund or the Transfer Agent may be liable for any losses
due to unauthorized or fraudulent instructions. Neither the Fund nor the
Transfer Agent will be liable for following telephone instructions
reasonably believed to be genuine.
During times of drastic economic or market conditions, you
may experience difficulty in contacting the Transfer Agent by telephone
to request a redemption or exchange of Fund shares. In such cases, you
should consider using the other redemption procedures described herein.
Use of these other redemption procedures may result in your redemption
request being processed at a later time than it would have been if
telephone redemption had been used. During the delay, the Fund's net
asset value may fluctuate.
REGULAR REDEMPTION -- Under the regular redemption procedure, you may
redeem shares by written request mailed to Dreyfus Premier Value Fund,
P.O. Box 6587, Providence, Rhode Island 02940-6587, or, if for Dreyfus
retirement plan accounts, to The Dreyfus Trust Company, Custodian, P.O.
Box 6427, Providence, Rhode Island 02940-6427. Written redemption
requests must specify the Class of shares being redeemed. Redemption
requests must be signed by each shareholder, including each owner of a
joint account, and each signature must be guaranteed. The Transfer Agent
has adopted standards and procedures pursuant to which
signature-guarantees in proper form generally will be accepted from
domestic banks, brokers, dealers, credit unions, national securities
exchanges, registered securities associations, clearing agencies and
savings associations, as well as from participants in the New York Stock
Exchange Medallion Signature Program, the Securities Transfer Agents
Medallion Program ("STAMP"), and the Stock Exchanges Medallion Program.
If you have any questions with respect to
PAGE 27
signature-guarantees, please contact your Service Agent or call the
telephone number listed on the cover of this Prospectus.
Redemption proceeds of at least $1,000 will be wired to any
member bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
WIRE REDEMPTION PRIVILEGE -- You may request by wire or telephone
that redemption proceeds (minimum $1,000) be wired to your account at a
bank which is a member of the Federal Reserve System, or a correspondent
bank if your bank is not a member. You also may direct that redemption
proceeds be paid by check (maximum $150,000 per day)made out to the
owners of record and mailed to your address. Redemption proceeds of less
than $1,000 will be paid automatically by check. Holders of jointly
registered Fund or bank accounts may have redemption proceeds of not more
than $250,000 wired within any 30-day period. You may telephone
redemption requests by calling your Service Agent, or 1-800-554-4611 or,
if you are calling from overseas, call 516-794-5452. The Statement of
Additional Information sets forth instructions for transmitting
redemption requests by wire.
TELEPHONE REDEMPTION PRIVILEGE -- You may request by telephone that
redemption proceeds (maximum $150,000 per day) be paid by check and
mailed to your address. You may telephone redemption instructions by
calling your Service Agent, or 1-800-554-4611 or, if you are calling from
overseas, call 516-794-5452.
TELETRANSFER PRIVILEGE -- You may request by telephone that
redemption proceeds (minimum $500 per day) be transferred between your
Fund account and your bank account. Only a bank account maintained in a
domestic financial institution which is an Automated Clearing House
member may be designated. Redemption proceeds will be on deposit in your
account at an Automated Clearing House member bank ordinarily two days
after receipt of the redemption request or, at your request, paid by
check (maximum $150,000 per day) and mailed to your address. Holders of
jointly registered Fund or bank accounts may redeem through the
TELETRANSFER Privilege for transfer to their bank account not more than
$250,000 within any 30-day period.
If you have selected the TELETRANSFER Privilege, you may
request a TELETRANSFER redemption of shares by calling your Service
Agent, or 1-800-554-4611 or, if you are calling from overseas, call
516-794-5452.
REDEMPTION THROUGH A SELECTED DEALER -- If you are a customer of a
Selected Dealer, you may make redemption requests to your Selected
Dealer. If the Selected Dealer transmits the redemption request so that
it is received by the Transfer Agent prior to the close of trading on the
floor of the New York Stock Exchange (currently 4:00 p.m., New York
time), the redemption request will be effective on that day. If a
redemption request is received by the Transfer Agent after the close of
trading on the floor of the New York Stock Exchange, the redemption
request will be effective on the next business day. It is the
responsibility of the Selected Dealer to transmit a request so that it is
received in a timely manner. The proceeds of the redemption are credited
to your account with the Selected Dealer. See "How to Buy Shares" for a
discussion of additional conditions or fees that may be imposed upon
redemption.
PAGE 28
In addition, the Distributor or its designee will accept
orders from Selected Dealers with which the Distributor has sales
agreements for the repurchase of shares held by shareholders. Repurchase
orders received by dealers by the close of trading on the floor of the
New York Stock Exchange on any business day and transmitted to the
Distributor or its designee prior to the close of its business day
(normally 5:15 p.m., New York time) are effected at the price determined
as of the close of trading on the floor of the New York Stock Exchange on
that day. Otherwise, the shares will be redeemed at the next determined
net asset value. It is the responsibility of the Selected Dealer to
transmit orders on a timely basis. The Selected Dealer may charge the
shareholder a fee for executing the order. This repurchase arrangement is
discretionary and may be withdrawn at any time.
REINVESTMENT PRIVILEGE -- Upon written request, you may reinvest up
to the number of Class A or Class B shares you have redeemed, within 45
days of redemption, at the then-prevailing net asset value without a
sales load, or reinstate your account for the purpose of exercising Fund
Exchanges. Upon reinstatement, with respect to Class B shares, or Class A
shares if such shares were subject to a CDSC, the shareholder's account
will be credited with an amount equal to the CDSC previously paid upon
redemption of the Class A or Class B shares reinvested. The Reinvestment
Privilege may be exercised only once.
DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN
(CLASS A, CLASS B AND CLASS C SHARES ONLY)
Class B and Class C shares are subject to a Distribution
Plan, and Class A, Class B and Class C shares are subject to a
Shareholder Services Plan.
DISTRIBUTION PLAN -- Under the Distribution Plan, adopted pursuant to
Rule 12b-1 under the 1940 Act, the Fund pays the Distributor for
distributing the Fund's Class B and Class C shares at an annual rate of
.75 of 1% of the value of the average daily net assets of Class B and
Class C.
SHAREHOLDER SERVICES PLAN -- Under the Shareholder Services Plan, the
Fund pays the Distributor for the provision of certain services to the
holders of Class A, Class B and Class C shares a fee at the annual rate
of .25 of 1% of the value of the average daily net assets of of each such
Class. The services provided may include personal services relating to
shareholder accounts, such as answering shareholder inquiries regarding
the Fund and providing reports and other information, and services
related to the maintenance of shareholder accounts. The Distributor may
make payments to Service Agents in respect of these services. The
Distributor determines the amounts to be paid to Service Agents.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily pays dividends from net investment income
and distributes net realized securities gains, if any, once a year, but
it may make distributions on a more frequent basis to comply with the
distribution requirements of the Code, in all events in a manner
consistent with the provisions of the 1940 Act. The Fund will not make
distributions from net realized securities gains unless capital loss
carryovers, if any, have been utilized or have expired. You may choose
whether to receive dividends and distributions in cash or to reinvest in
additional shares of the same Class at net asset value. Dividends and
distributions paid in cash to Retirement Plans, however, may be subject
to additional tax as described below. All expenses are accrued daily and
deducted
PAGE 29
before declaration of dividends. Dividends paid by each Class
will be calculated at the same time and in the same manner and will be of
the same amount, except that the expenses attributable solely to a
particular Class will be borne exclusively by such Class. Class B and
Class C shares will receive lower per share dividends than Class A
shares, which will receive lower per share dividends than Class R shares,
because of the higher expenses borne by the relevant Class. See "Fee
Table."
Dividends paid by the Fund to qualified Retirement Plans,
IRAs (including IRA "Rollover Accounts") or certain non-qualified
deferred compensation plans ordinarily will not be subject to taxation
until the proceeds are distributed from the Retirement Plan or IRA. The
Fund will not report dividends paid to such Plans and IRAs to the IRS.
Generally, distributions from such Retirement Plans and IRAs, except
those representing returns of non-deductible contributions thereto, will
be taxable as ordinary income and, if made prior to the time the
participant reaches age 591\2, generally will be subject to an additional
tax equal to 10% of the taxable portion of the distribution. If the
distribution from such a Retirement Plan (other than certain governmental
or church plans) or IRA for any taxable year following the year in which
the participant reaches age 701\2 is less than the "minimum required
distribution" for that taxable year, an excise tax equal to 50% of the
deficiency may be imposed by the IRS. The administrator, trustee or
custodian of such a Retirement Plan or IRA will be responsible for
reporting distributions from such Plans and IRAs to the IRS. Participants
in qualified Retirement Plans will receive a disclosure statement
describing the consequences of a distribution from such a Plan from the
administrator, trustee or custodian of the Plan prior to receiving the
distribution. Moreover, certain contributions to a qualified Retirement
Plan or IRA in excess of the amounts permitted by law may be subject to
an excise tax.
Dividends derived from net investment income, together with
distributions from any net realized short-term securities gains and all
or a portion of any gains realized from the sale or other disposition of
certain market discount bonds, paid by the Fund will be taxable to U.S.
shareholders as ordinary income whether received in cash or reinvested in
Fund shares. Depending upon the composition of the Fund's income, a
portion of the dividends from net investment income may qualify for the
dividends received deduction allowable to certain U.S. corporations.
Distributions from net realized long-term securities gains of the Fund
will be taxable to U.S. shareholders as long-term capital gains for
Federal income tax purposes, regardless of how long shareholders have
held their Fund shares and whether such distributions are received in
cash or reinvested in Fund shares. The Code provides that the net capital
gain of an individual generally will not be subject to Federal income tax
at a rate in excess of 28%. Dividends and distributions also may be
subject to state and local taxes.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of
certain market discount bonds, paid by the Fund to a foreign investor
generally are subject to U.S. nonresident withholding taxes at the rate
of 30%, unless the foreign investor claims the benefit of a lower rate
specified in a tax treaty. Distributions from net realized long-term
securities gains paid by the Fund to a foreign investor as well as the
PAGE 30
proceeds of any redemptions from a foreign investor's account, regardless
of the extent to which gain or loss may be realized, generally will not
be subject to U.S. nonresident withholding tax. However, such
distributions may be subject to backup withholding, as described below,
unless the foreign investor certifies his non-U.S. residency status.
Notice as to the tax status of your dividends and
distributions is mailed to you annually. You also will receive periodic
summaries of your account which will include information as to income
dividends and distributions from securities gains, if any, paid during
the year. Participants in a Retirement Plan or IRA should receive
periodic statements from the trustee, custodian or administrator of their
Plan.
The Code provides for the "carryover" of some or all of the
sales load imposed on Class A shares, if you exchange your Class A shares
for shares of another fund advised by The Dreyfus Corporation within 91
days of purchase and such other fund reduces or eliminates its otherwise
applicable sales load charge for the purpose of the exchange. In this
case, the amount of your sales load charge for Class A shares, up to the
amount of the reduction of the sales load charge on the exchange, is not
included in the basis of your Class A shares for purposes of computing
gain or loss on the exchange, and instead is added to the basis of the
fund shares received on the exchange.
The exchange of shares of one fund for shares of another is
treated for Federal income tax purposes as a sale of the shares given in
exchange by the shareholder and, therefore, an exchanging shareholder may
realize, or an exchange on behalf of a Retirement Plan which is not tax
exempt may result in, a taxable gain or loss.
With respect to individual investors and certain
non-qualified Retirement Plans, Federal regulations generally require the
Fund to withhold ("backup withholding") and remit to the U.S. Treasury
31% of dividends, distributions from net realized securities gains and
the proceeds of any redemption, regardless of the extent to which gain or
loss may be realized, paid to a shareholder if such shareholder fails to
certify either that the TIN furnished in connection with opening an
account is correct, or that such shareholder has not received notice from
the IRS of being subject to backup withholding as a result of a failure
to properly report taxable dividend or interest income on a Federal
income tax return. Furthermore, the IRS may notify the Fund to institute
backup withholding if the IRS determines that a shareholder's TIN is
incorrect or if a shareholder has failed to properly report dividend and
interest income on such shareholder's Federal income tax return.
A TIN is either the Social Security number or employer
identification number of the record owner of the account. Any tax
withheld as a result of backup withholding does not constitute an
additional tax imposed on the record owner of the account, and may be
claimed as a credit on the record owner's Federal income tax return.
Management of the Fund believes that the Fund qualified for
the fiscal year ended October 31, 1996 as a "regulated investment
company" under the Code. The Fund intends to continue to so qualify if
such qualification is in the best interests of its shareholders.
Qualification as a regulated investment company relieves the Fund of any
liability for Federal income taxes to the extent its earn-
PAGE 31
ings are distributed in accordance with applicable provisions of the Code.
The Fund is subject to a non-deductible 4% excise tax, measured with
respect to certain undistributed amounts of taxable income and capital
gains.
You should consult your tax adviser regarding specific
questions as to Federal, state and local taxes.
PERFORMANCE INFORMATION
For purposes of advertising, performance for each Class of
shares will be calculated on the basis of average annual total return
and/or total return. These total return figures reflect changes in the
price of the shares and assume that any income dividends and or capital
gains distributions made by the Fund during the measuring period were
reinvested in shares of the same Class. These figures also take into
account any applicable service and distribution fees. As a result, at any
given time, the performance of Class B and Class C should be expected to
be lower than that of Class A and the performance of Class A, Class B and
Class C should be expected to be lower than that of Class R. Performance
for each Class will be calculated separately.
Average annual total return is calculated pursuant to a
standardized formula which assumes that an investment in the Fund was
purchased with an initial payment of $1,000 and that the investment was
redeemed at the end of a stated period of time, after giving effect to
the reinvestment of dividends and distributions during the period. The
return is expressed as a percentage rate which, if applied on a
compounded annual basis, would result in the redeemable value of the
investment at the end of the period. Advertisements of the Fund's
performance will include the Fund's average annual total return for one,
five and ten year periods, or for shorter time periods depending upon the
length of time during which the Fund has operated.
Total return is computed on a per share basis and assumes the
reinvestment of dividends and distributions. Total return generally is
expressed as a percentage rate which is calculated by combining the
income and principal changes for a specified period and dividing by the
net asset value (or maximum offering price in the case of Class A) per
share at the beginning of the period. Advertisements may include the
percentage rate of total return or may include the value of a
hypothetical investment at the end of the period which assumes the
application of the percentage rate of total return. Total return also may
be calculated by using the net asset value per share at the beginning of
the period instead of the maximum offering price per share at the
beginning of the period for Class A shares or without giving effect to any
applicable CDSC at the end of the period for Class B and Class C shares.
Calculations based on the net asset value per share do not reflect the
deduction of the applicable sales charge which, if reflected, would
reduce the performance quoted.
Performance will vary from time to time and past results are
not necessarily representative of future results. You should remember
that performance is a function of portfolio management in selecting the
type and quality of portfolio securities and is affected by operating
expenses. Performance information, such as that described above, may not
provide a basis for comparison with other investments or other investment
companies using a different method of calculating performance.
PAGE 32
Comparative performance information may be used from time to
time in advertising or marketing the Fund's shares, including data from
Lipper Analytical Services, Inc., Standard & Poor's 500 Composite Stock
Price Index, the Dow Jones Industrial Average, Morningstar, Inc. and
other industry publications.
GENERAL INFORMATION
The Fund was organized as an unincorporated business trust
under the laws of the Commonwealth of Massachusetts pursuant to an
Agreement and Declaration of Trust (the "Trust Agreement") dated July 24,
1985, and commenced operations on October 1, 1986. On September 1, 1995,
the Fund's name was changed from Dreyfus Strategic Investing to Premier
Strategic Investing, and; on August 5, 1996, to Premier Value Fund; and
on March 3, 1997, to Dreyfus Premier Value Fund. The Fund is authorized
to issue an unlimited number of shares of beneficial interest, par value
$.001 per share. The Fund's shares are classified into four classes _
Class A, Class B, Class C and Class R. Each share has one vote and
shareholders will vote in the aggregate and not by class except as
otherwise required by law or when class voting is permitted by the Fund's
Board. However, only holders of Class B and Class C shares will be
entitled to vote on matters submitted to shareholders pertaining to the
Distribution Plan.
Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Fund.
However, the Trust Agreement disclaims shareholder liability for acts or
obligations of the Fund and requires that notice of such disclaimer be
given in each agreement, obligation or instrument entered into or
executed by the Fund or a Board member. The Trust Agreement provides for
indemnification from the Fund's property for all losses and expenses of
any shareholder personally held liable for the obligations of the Fund.
Thus, the risk of a shareholder's incurring financial loss on account of
shareholder liability is limited to circumstances in which the Fund
itself would be unable to meet its obligations, a possibility which
management believes is remote. Upon payment of any liability incurred by
the Fund, the shareholder paying such liability will be entitled to
reimbursement from the general assets of the Fund. The Fund intend to
conduct its operations in such a way so as to avoid, as far as possible,
ultimate liability of the shareholders for liabilities of the Fund. As
described under "Management of the Fund" in the Statement of Additional
Information, the Fund ordinarily will not hold shareholder meetings;
however, shareholders under certain circumstances may have the right to
call a meeting of shareholders for the purpose of voting to remove Board
members.
The Transfer Agent maintains a record of your ownership and
sends you confirmations and statements of account. The Fund sends annual
and semi-annual financial statements to all its shareholders.
Shareholder inquiries may be made to your Service Agent or by
writing to the Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York
11556-0144.
PAGE 33
APPENDIX
INVESTMENT TECHNIQUES
FOREIGN CURRENCY TRANSACTIONS -- Foreign currency transactions may be
entered into for a variety of purposes, including: to fix in U.S.
dollars, between trade and settlement date, the value of a security the
Fund has agreed to buy or sell; or to hedge the U.S. dollar value of
securities the Fund already owns, particularly if it expects a decrease
in the value of the currency in which the foreign security is
denominated; or to gain exposure to the foreign currency in an attempt to
realize gains.
Foreign currency transactions may involve, for example, the
Fund's purchase of foreign currencies for U.S. dollars or the maintenance
of short positions in foreign currencies, which would involve the Fund
agreeing to exchange an amount of a currency it did not currently own for
another currency at a future date in anticipation of a decline in the
value of the currency sold relative to the currency the Fund contracted
to receive in the exchange. The Fund's success in these transactions will
depend principally on The Dreyfus Corporation's ability to predict
accurately the future exchange rates between foreign currencies and the
U.S. dollar.
SHORT-SELLING -- In these transactions, the Fund sells a security it
does not own in anticipation of a decline in the market value of the
security. To complete the transaction, the Fund must borrow the security
to make delivery to the buyer. The Fund is obligated to replace the
security borrowed by purchasing it subsequently at the market price at
the time of replacement. The price at such time may be more or less than
the price at which the security was sold by the Fund, which would result
in a loss or gain, respectively.
Securities will not be sold short if, after effect is given
to any such short sale, the total market value of all securities sold
short would exceed 25% of the value of the Fund's net assets. The Fund
may not sell short the securities of any single issuer listed on a
national securities exchange to the extent of more than 5% of the value
of the Fund's net assets. The Fund may not make a short sale which
results in the Fund having sold short in the aggregate more than 5% of
the outstanding securities of any class of an issuer.
The Fund also may make short sales "against the box," in
which the Fund enters into a short sale of a security it owns in order to
hedge an unrealized gain on the security. At no time will more than 15%
of the value of the Fund's net assets be in deposits on short sales
against the box.
LEVERAGE -- Leveraging exaggerates the effect on net asset value of
any increase or decrease in the market value of the Fund's portfolio.
Money borrowed for leveraging will be limited to 33 1\3% of the value of
the Fund's total assets. These borrowings will be subject to interest
costs which may or may not be recovered by appreciation of the securities
purchased; in certain cases, interest costs may exceed the return
received on the securities purchased.
The Fund may enter into reverse repurchase agreements with
banks, brokers or dealers. This form of borrowing involves the transfer
by the Fund of an underlying debt instrument in return for cash proceeds
based on a percentage of the value of the security. The Fund retains the
right to receive interest and
PAGE 34
principal payments on the security. At an agreed upon future date, the
Fund repurchases the security at principal plus accrued interest. Except
for these transactions, the Fund's borrowings generally will be
unsecured.
USE OF DERIVATIVES -- The Fund may invest in the types of Derivatives
enumerated under "Description of the Fund -- Investment Considerations
and Risks -- Use of Derivatives." These instruments and certain related
risks are described more specifically under "Investment Objective and
Management Policies _ Management Policies _ Derivatives" in the Statement
of Additional Information.
Derivatives may entail investment exposures that are greater
than their cost would suggest, meaning that a small investment in
Derivatives could have a large potential impact on the Fund's
performance.
If the Fund invests in Derivatives at inappropriate times or
judges market conditions incorrectly, such investments may lower the
Fund's return or result in a loss. The Fund also could experience losses
if its Derivatives were poorly correlated with its other investments, or
if the Fund were unable to liquidate its position because of an illiquid
secondary market. The market for many Derivatives is, or suddenly can
become, illiquid. Changes in liquidity may result in significant, rapid
and unpredictable changes in the prices for Derivatives.
Although the Fund will not be a commodity pool, certain
Derivatives subject the Fund to the rules of the Commodity Futures
Trading Commission which limit the extent to which the Fund can invest in
such Derivatives. The Fund may invest in futures contracts and options
with respect thereto for hedging purposes without limit. However, the
Fund may not invest in such contracts and options for other purposes if
the sum of the amount of initial margin deposits and premiums paid for
unexpired options with respect to such contracts, other than for bona
fide hedging purposes, exceeds 5% of the liquidation value of the Fund's
assets, after taking into account unrealized profits and unrealized
losses on such contracts and options; provided, however, that in the case
of an option that is in-the-money at the time of purchase, the
in-the-money amount may be excluded in calculating the 5% limitation.
The Fund may invest up to 5% of its assets, represented by
the premium paid, in the purchase of call and put options. The Fund may
write (i.e., sell) covered call and put option contracts to the extent of
20% of the value of its net assets at the time such option contracts are
written. When required by the Securities and Exchange Commission, the
Fund will set aside permissible liquid assets in a segregated account to
cover its obligations relating to its transactions in Derivatives. To
maintain this required cover, the Fund may have to sell portfolio
securities at disadvantageous prices or times since it may not be
possible to liquidate a Derivative position at a reasonable price.
LENDING PORTFOLIO SECURITIES -- The Fund may lend securities from its
portfolio to brokers, dealers and other financial institutions needing to
borrow securities to complete certain transactions. The Fund continues to
be entitled to payments in amounts equal to the interest, dividends or
other distributions payable on the loaned securities, which affords the
Fund an opportunity to earn interest on the amount of the loan and on the
loaned securities' collateral. Loans of portfolio securities may not
exceed 33 1\3% of the value of the Fund's total assets, and the
PAGE 35
Fund will receive collateral consisting of cash, U.S. Government
securities or irrevocable letters of credit which will be maintained at
all times in an amount equal to at least 100% of the current market value
of the loaned securities. Such loans are terminable by the Fund at any
time upon specified notice. The Fund might experience risk of loss if the
institution with which it has engaged in a portfolio loan transaction
breaches its agreement with the Fund.
FORWARD COMMITMENTS -- The Fund may purchase securities on a forward
commitment basis or when-issued basis, which means that delivery and
payment take place a number of days after the date of the commitment to
purchase. The payment obligation and the interest rate receivable on a
forward commitment or when-issued security are fixed when the Fund enters
into the commitment, but the Fund does not make payment until it receives
delivery from the counterparty. The Fund will commit to purchase such
securities only with the intention of actually acquiring the securities,
but the Fund may sell these securities before the settlement date if it
is deemed advisable. A segregated account of the Fund consisting of
permissible liquid assets at least equal at all times to the amount of
the when-issued commitments will be established and maintained at the
Fund's custodian bank.
CERTAIN PORTFOLIO SECURITIES
CONVERTIBLE SECURITIES -- Convertible securities may be converted at
either a stated price or stated rate into underlying shares of common
stock. Convertible securities have characteristics similar to both
fixed-income and equity securities. Convertible securities generally are
subordinated to other similar but non-convertible securities of the same
issuer, although convertible bonds, as corporate debt obligations, enjoy
seniority in right of payment to all equity securities, and convertible
preferred stock is senior to common stock, of the same issuer. Because of
the subordination feature, however, convertible securities typically have
lower ratings than similar non-convertible securities.
WARRANTS -- A warrant is an instrument issued by a corporation which
gives the holder the right to subscribe to a specified amount of the
corporation's capital stock at a set price for a specified period of
time. The Fund may invest up to 5% of its net assets in warrants, except
that this limitation does not apply to warrants purchased by the Fund
that are sold in units with, or attached to, other securities.
ZERO COUPON SECURITIES -- The Fund may invest in zero coupon U.S.
Treasury securities, which are Treasury Notes and Bonds that have been
stripped of their unmatured interest coupons, the coupons themselves and
receipts or certificates representing interests in such stripped debt
obligations and coupons. Zero coupon securities also are issued by
corporations and financial institutions which constitute a proportionate
ownership of the issuer's pool of underlying U.S. Treasury securities. A
zero coupon security pays no interest to its holder during its life and
is sold at a discount to its face value at maturity. The amount of the
discount fluctuates with the market price of the security. The market
prices of zero coupon securities generally are more volatile than the
market prices of securities that pay interest periodically and are likely
to respond to a greater degree to changes in interest rates than non-zero
coupon securities having similar maturities and credit qualities.
PAGE 36
MONEY MARKET INSTRUMENTS -- The Fund may invest in the following
types of money market instruments.
U.S. GOVERNMENT SECURITIES. Securities issued or guaranteed
by the U.S. Government or its agencies or instrumentalities include U.S.
Treasury securities that differ in their interest rates, maturities and
times of issuance. Some obligations issued or guaranteed by U.S.
Government agencies and instrumentalities are supported by the full faith
and credit of the U.S. Treasury; others by the right of the issuer to
borrow from the Treasury; others by discretionary authority of the U.S.
Government to purchase certain obligations of the agency or
instrumentality; and others only by the credit of the agency or
instrumentality. These securities bear fixed, floating or variable rates
of interest. While the U.S. Government provides financial support to such
U.S. Government-sponsored agencies and instrumentalities, no assurance
can be given that it will always do so since it is not so obligated by
law.
REPURCHASE AGREEMENTS. In a repurchase agreement, the Fund
buys, and the seller agrees to repurchase, a security at a mutually
agreed upon time and price (usually within seven days). The repurchase
agreement thereby determines the yield during the purchaser's holding
period, while the seller's obligation to repurchase is secured by the
value of the underlying security. Repurchase agreements could involve
risks in the event of a default or insolvency of the other party to the
agreement, including possible delays or restrictions upon the Fund's
ability to dispose of the underlying securities. The Fund may enter into
repurchase agreements with certain banks or non-bank dealers.
BANK OBLIGATIONS. The Fund may purchase certificates of
deposit, time deposits, bankers' acceptances and other short-term
obligations issued by domestic banks, foreign subsidiaries or foreign
branches of domestic banks, domestic and foreign branches of foreign
banks, domestic savings and loan associations and other banking
institutions. With respect to such securities issued by foreign
subsidiaries or foreign branches of domestic banks, and domestic and
foreign branches of foreign banks, the Fund may be subject to additional
investment risks that are different in some respects from those incurred
by a fund which invests only in debt obligations of U.S. domestic
issuers. See "Description of the Fund _ Investment Considerations and
Risks _ Foreign Securities."
Certificates of deposit are negotiable certificates
evidencing the obligation of a bank to repay funds deposited with it for
a specified period of time.
Time deposits are non-negotiable deposits maintained in a
banking institution for a specified period of time (in no event longer
than seven days) at a stated interest rate.
Bankers' acceptances are credit instruments evidencing the
obligation of a bank to pay a draft drawn on it by a customer. These
instruments reflect the obligation both of the bank and the drawer to pay
the face amount of the instrument upon maturity. The other short-term
obligations may include uninsured, direct obligations bearing fixed,
floating or variable interest rates.
COMMERCIAL PAPER. Commercial paper consists of short-term,
unsecured promissory notes issued to finance short-term credit needs. The
commercial paper purchased by the Fund will consist only of direct
obligations which, at the time of their purchase, are (a) rated not lower
than Prime-1 by Moody's or
PAGE 37
A-1 by S&P, (b) issued by companies having an outstanding unsecured debt
issue currently rated at least A3 by Moody's or A- by S&P, or (c) if
unrated, determined by The Dreyfus Corporation to
be of comparable quality to those rated obligations which may be
purchased by the Fund.
ILLIQUID SECURITIES -- The Fund may invest up to 15% of the value of
its net assets in securities as to which a liquid trading market does not
exist, provided such investments are consistent with the Fund's
investment objective. Such securities may include securities that are not
readily marketable, such as certain securities that are subject to legal
or contractual restrictions on resale, repurchase agreements providing
for settlement in more than seven days after notice, and certain
privately negotiated, non-exchange traded options and securities used to
cover such options. As to these securities, the Fund is subject to a risk
that should the Fund desire to sell them when a ready buyer is not
available at a price the Fund deems representative of their value, the
value of the Fund's net assets could be adversely affected.
RATINGS -- Securities rated Ba by Moody's are judged to have
speculative elements; their future cannot be considered as well assured
and often the protection of interest and principal payments may be very
moderate. Securities rated BB by S&P are regarded as having predominantly
speculative characteristics and, while such obligations have less
near-term vulnerability to default than other speculative grade debt,
they face major ongoing uncertainties or exposure to adverse business,
financial or economic conditions which could lead to inadequate capacity
to meet timely interest and principal payments. Securities rated Caa by
Moody's are of poor standing and may be in default or there may be
present elements of danger with respect to principal or interest. S&P
typically assigns a CCC rating to debt which has a current identifiable
vulnerability to default and is dependent upon favorable business,
financial and economic conditions to meet timely payments of interest and
repayment of principal. Such securities, though high yielding, are
characterized by great risk. See "Appendix" in the Statement of
Additional Information for a general description of securities ratings.
The ratings of Moody's and S&P represent their opinions as to
the quality of the obligations which they undertake to rate. Ratings are
relative and subjective and, although ratings may be useful in evaluating
the safety of interest and principal payments, they do not evaluate the
market value risk of such obligations. Although these ratings may be an
initial criterion for selection of portfolio investments, The Dreyfus
Corporation also will evaluate these securities and the ability of the
issuers of such securities to pay interest and principal. The Fund's
ability to achieve its investment objective may be more dependent on The
Dreyfus Corporation's credit analysis than might be the case for a fund
that invested in higher rated securities.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS
AND IN THE FUND'S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER
OF THE FUND'S SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
FUND. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH,
OR TO ANY PERSON TO WHOM, SUCH OFFERING MAY NOT LAWFULLY BE MADE.
PAGE 38
[This Page Intentionally Left Blank]
PAGE 39
Copy Rights 1997 Dreyfus Service Corporation 037p030397
DREYFUS PREMIER VALUE FUND
CLASS A, CLASS B, CLASS C AND CLASS R SHARES
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
MARCH 3, 1997
This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus of
Dreyfus Premier Value Fund (the "Fund"), dated March 3, 1997. To obtain a
copy of the Fund's Prospectus, please write to the Fund at 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144.
The Dreyfus Corporation (the "Manager") serves as the Fund's investment
adviser.
Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of the Fund's shares.
TABLE OF CONTENTS
Page
Investment Objective and Management Policies B-2
Management of the Fund B-11
Management Agreement B-16
Purchase of Shares B-18
Distribution Plan and Shareholder Services Plan B-20
Redemption of Shares B-21
Shareholder Services B-23
Determination of Net Asset Value B-26
Dividends, Distributions and Taxes B-27
Portfolio Transactions B-29
Performance Information B-30
Information About the Fund B-31
Transfer and Dividend Disbursing Agent, Custodian, Counsel
and Independent Auditors B-32
Appendix B-33
Financial Statements B-38
Report of Independent Auditors B-50
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES
The following information supplements and should be read in conjunction
with the sections in the Fund's Prospectus entitled "Description of the Fund"
and "Appendix."
Portfolio Securities
Depositary Receipts. These securities may be purchased through
"sponsored" or "unsponsored" facilities. A sponsored facility is established
jointly by the issuer of the underlying security and a depositary, whereas a
depositary may establish an unsponsored facility without participation by the
issuer of the underlying security and a depositary, whereas a depositary may
establish an unsponsored facility without participation by the issuer of the
deposited security. Holders of unsponsored depositary receipts generally
bear all the costs of such facilities and the depositary of an unsponsored
facility frequently is under no obligation to distribute shareholder
communications received from the issuer of the deposited security or to pass
through voting rights to the holders of such receipts in respect of the
deposited securities.
Repurchase Agreements. The Fund's custodian or sub-custodian will have
custody of, and will hold in a segregated account, securities acquired by a
Fund under a repurchase agreement. Repurchase agreements are considered by
the staff of the Securities and Exchange Commission to be loans by the Fund.
In an attempt to reduce the risk of incurring a loss on a repurchase
agreement, the Fund will enter into repurchase agreements only with domestic
banks with total assets in excess of $1 billion, or primary government
securities dealers reporting to the Federal Reserve Bank of New York, with
respect to securities of the type in which the Fund may invest, and will
require that additional securities be deposited with it if the value of the
securities purchased should decrease below the resale price.
Commercial Paper and Other Short-Term Corporate Obligations. These
instruments include variable amount master demand notes, which are
obligations that permit the Fund to invest fluctuating amounts at varying
rates of interest pursuant to direct arrangements between the Fund, as
lender, and the borrower. These notes permit daily changes in the amounts
borrowed. Because these obligations are direct lending arrangements between
the lender and borrower, it is not contemplated that such instruments
generally will be traded, and there generally is no established secondary
market for these obligations, although they are redeemable at face value,
plus accrued interest, at any time. Accordingly, where these obligations are
not secured by letters of credit or other credit support arrangements, the
Fund's right to redeem is dependent on the ability of the borrower to pay
principal and interest on demand. Such obligations frequently are not rated
by credit rating agencies, and the Fund may invest in them only if at the
time of an investment the borrower meets the criteria set forth in the
Prospectus for other commercial paper issuers.
Convertible Securities. Although to a lesser extent than with fixed-
income securities, the market value of convertible securities tends to
decline as interest rates increase and, conversely, tends to increase as
interest rates decline. In addition, because of the conversion feature, the
market value of convertible securities tends to vary with fluctuations in the
market value of the underlying common stock. A unique feature of convertible
securities is that as the market price of the underlying common stock
declines, convertible securities tend to trade increasingly on a yield basis,
and so may not experience market value declines to the same extent as the
underlying common stock. When the market price of the underlying common
stock increases, the prices of the convertible securities tend to rise as a
reflection of the value of the underlying common stock. While no securities
investments are without risk, investments in convertible securities generally
entail less risk than investments in common stock of the same issuer.
Convertible securities are investments that provide for a stable stream
of income with generally higher yields than common stocks. There can be no
assurance of current income because the issuers of the convertible securities
may default on their obligations. A convertible security, in addition to
providing fixed income, offers the potential for capital appreciation through
the conversion feature, which enables the holder to benefit from increases in
the market price of the underlying common stock. There can be no assurance
of capital appreciation, however, because securities prices fluctuate.
Convertible securities, however, generally offer lower interest or dividend
yields than non-convertible securities of similar quality because of the
potential for capital appreciation.
Foreign Government Obligations; Securities of Supranational Entities.
The Fund may invest in obligations issued or guaranteed by one or more
foreign governments or any of their political subdivisions, agencies or
instrumentalities that are determined by the Manager to be of comparable
quality to the other obligations in which the Fund may invest. Such
securities also include debt obligations of supranational entities.
Supranational entities include international organizations designated or
supported by governmental entities to promote economic reconstruction or
development and international banking institutions and related government
agencies. Examples include the International Bank for Reconstruction and
Development (the World Bank), the European Coal and Steel Community, the
Asian Development Bank and the InterAmerican Development Bank.
Illiquid Securities. When purchasing securities that have not been
registered under the Securities Act of 1933, as amended, and are not readily
marketable, the Fund will endeavor, to the extent practicable, to obtain the
right to registration at the expense of the issuer. Generally, there will be
a lapse of time between the Fund's decision to sell any such security and the
registration of the security permitting sale. During any such period, the
price of the securities will be subject to market fluctuations. However,
where a substantial market of qualified institutional buyers has developed
for certain unregistered securities purchased by the Fund pursuant to Rule
144A under the Securities Act of 1933, as amended, the Fund intends to treat
such securities as liquid securities in accordance with procedures approved
by the Fund's Board. Because it is not possible to predict with assurance
how the market for specific restricted securities sold pursuant to Rule 144A
will develop, the Fund's Board has directed the Manager to monitor carefully
the Fund's investments in such securities with particular regard to trading
activity, availability of reliable price information and other relevant
information. To the extent that, for a period of time, qualified
institutional buyers cease purchasing restricted securities pursuant to Rule
144A, the Fund's investing in such securities may have the effect of
increasing the level of illiquidity in its investment portfolio during such
period.
Management Policies
Leverage. For borrowings for investment purposes, the Investment
Company Act of 1940, as amended (the "1940 Act"), requires the Fund to
maintain continuous asset coverage (that is, total assets including
borrowings, less liabilities exclusive of borrowings) of 300% of the amount
borrowed. If the 300% asset coverage should decline as a result of market
fluctuations or other reasons, the Fund may be required to sell some of its
portfolio holdings within three days to reduce the debt and restore the 300%
asset coverage, even though it may be disadvantageous from an investment
standpoint to sell securities at that time. The Fund also may be required to
maintain minimum average balances in connection with such borrowing or to pay
a commitment or other fee to maintain a line of credit; either of these
requirements would increase the cost of borrowings over the stated interest
rate. To the extent the Fund enters into a reverse repurchase agreement, the
Fund will maintain in a segregated custodial account permissible liquid
assets at least equal to the aggregate amount of its reverse repurchase
obligations, plus accrued interest, in certain cases, in accordance with
releases promulgated by the Securities and Exchange Commission. The
Securities and Exchange Commission views reverse repurchase transactions as
collateralized borrowings by the Fund.
Short-Selling. Until the Fund closes its short position or replaces the
borrowed security, it will: (a) maintain a segregated account, containing
permissible liquid assets, at such a level that the amount deposited in the
account plus the amount deposited with the broker as collateral always equals
the current value of the security sold short; or (b) otherwise cover its
short position.
Lending Portfolio Securities. In connection with the Fund's securities
lending transactions, the Fund may return to the borrower or a third party
which is unaffiliated with the Fund, and which is acting as a "placing
broker," a part of the interest earned from the investment of collateral
received for securities loaned.
The Securities and Exchange Commission currently requires that the
following conditions must be met whenever portfolio securities are loaned:
(1) the Fund must receive at least 100% cash collateral from the borrower;
(2) the borrower must increase such collateral whenever the market value of
the securities rises above the level of such collateral; (3) the Fund must be
able to terminate the loan at any time; (4) the Fund must receive reasonable
interest on the loan, as well as any dividends, interest or other
distributions payable on the loaned securities, and any increase in market
value; (5) the Fund may pay only reasonable custodian fees in connection with
the loan; and (6) while voting rights on the loaned securities may pass to
the borrower, the Fund's Board must terminate the loan and regain the right
to vote the securities if a material event adversely affecting the investment
occurs.
Derivatives. The Fund may invest in Derivatives (as defined in the
Fund's Prospectus) for a variety of reasons, including to hedge certain
market risks, to provide a substitute for purchasing or selling particular
securities or to increase potential income gain. Derivatives may provide a
cheaper, quicker or more specifically focused way for the Fund to invest than
"traditional" securities would.
Derivatives can be volatile and involve various types and degrees of
risk, depending upon the characteristics of the particular Derivative and the
portfolio as a whole. Derivatives permit a Fund to increase or decrease the
level of risk, or change the character of the risk, to which its portfolio is
exposed in much the same way as the Fund can increase or decrease the level
of risk, or change the character of the risk, of its portfolio by making
investments in specific securities.
Derivatives may be purchased on established exchanges or through
privately negotiated transactions referred to as over-the-counter
Derivatives. Exchange-traded Derivatives generally are guaranteed by the
clearing agency which is the issuer or counterparty to such Derivatives.
This guarantee usually is supported by a daily payment system (i.e.,
variation margin requirements) operated by the clearing agency in order to
reduce overall credit risk. As a result, unless the clearing agency
defaults, there is relatively little counterparty credit risk associated with
Derivatives purchased on an exchange. By contrast, no clearing agency
guarantees over-the-counter Derivatives. Therefore, each party to an over-
the-counter Derivative bears the risk that the counterparty will default.
Accordingly, the Manager will consider the creditworthiness of counterparties
to over-the-counter Derivatives in the same manner as it would review the
credit quality of a security to be purchased by the Fund. Over-the-counter
Derivatives are less liquid than exchange-traded Derivatives since the other
party to the transaction may be the only investor with sufficient
understanding of the Derivative to be interested in bidding for it.
Futures Transactions--In General. The Fund may enter into futures contracts
in U.S. domestic markets, such as the Chicago Board of Trade and the
International Monetary Market of the Chicago Mercantile Exchange, or on
exchanges located outside the United States, such as the London International
Financial Futures Exchange and the Sydney Futures Exchange Limited. Foreign
markets may offer advantages such as trading opportunities or arbitrage
possibilities not available in the United States. Foreign markets, however,
may have greater risk potential than domestic markets. For example, some
foreign exchanges are principal markets so that no common clearing facility
exists and an investor may look only to the broker for performance of the
contract. In addition, any profits that the Fund might realize in trading
could be eliminated by adverse changes in the exchange rate, or the Fund
could incur losses as a result of those changes. Transactions on foreign
exchanges may include both commodities which are traded on domestic exchanges
and those which are not. Unlike trading on domestic commodity exchanges,
trading on foreign commodity exchanges is not regulated by the Commodity
Futures Trading Commission.
Engaging in these transactions involves risk of loss to the Fund which
could adversely affect the value of the Fund's net assets. Although the Fund
intends to purchase or sell futures contracts only if there is an active
market for such contracts, no assurance can be given that a liquid market
will exist for any particular contract at any particular time. Many futures
exchanges and boards of trade limit the amount of fluctuation permitted in
futures contract prices during a single trading day. Once the daily limit
has been reached in a particular contract, no trades may be made that day at
a price beyond that limit or trading may be suspended for specified periods
during the trading day. Futures contract prices could move to the limit for
several consecutive trading days with little or no trading, thereby
preventing prompt liquidation of futures positions and potentially subjecting
the Fund to substantial losses.
Successful use of futures by the Fund also is subject to the Manager's
ability to predict correctly movements in the direction of the relevant
market and, to the extent the transaction is entered into for hedging
purposes, to ascertain the appropriate correlation between the transaction
being hedged and the price movements of the futures contract. For example,
if the Fund uses futures to hedge against the possibility of a decline in the
market value of securities held in its portfolio and the prices of such
securities instead increase, the Fund will lose part or all of the benefit of
the increased value of securities which it has hedged because it will have
offsetting losses in its futures positions. Furthermore, if in such
circumstances the Fund has insufficient cash, it may have to sell securities
to meet daily variation margin requirements. The Fund may have to sell such
securities at a time when it may be disadvantageous to do so.
Pursuant to regulations and/or published positions of the Securities and
Exchange Commission, the Fund may be required to segregate permissible liquid
assets in connection with its commodities transactions in an amount generally
equal to the value of the underlying commodity. The segregation of such
assets will have the effect of limiting the Fund's ability otherwise to
invest those assets.
Specific Futures Transactions. The Fund may purchase and sell stock index
futures contracts. A stock index future obligates the Fund to pay or receive
an amount of cash equal to a fixed dollar amount specified in the futures
contract multiplied by the difference between the settlement price of the
contract on the contract's last trading day and the value of the index based
on the stock prices of the securities that comprise it at the opening of
trading in such securities on the next business day.
The Fund may purchase and sell interest rate futures contracts. An
interest rate future obligates the Fund to purchase or sell an amount of a
specific debt security at a future date at a specific price.
The Fund may purchase and sell currency futures. A foreign currency
future obligates the Fund to purchase or sell an amount of a specific
currency at a future date at a specific price.
Options--In General. The Fund may purchase and write (i.e., sell) call or
put options with respect to specific securities. A call option gives the
purchaser of the option the right to buy, and obligates the writer to sell,
the underlying security or securities at the exercise price at any time
during the option period, or at a specific date. Conversely, a put option
gives the purchaser of the option the right to sell, and obligates the writer
to buy, the underlying security or securities at the exercise price at any
time during the option period, or at a specific date.
A covered call option written by the Fund is a call option with respect
to which the Fund owns the underlying security or otherwise covers the
transaction by segregating cash or other securities. A put option written by
the Fund is covered when, among other things, cash or liquid securities
having a value equal to or greater than the exercise price of the option are
placed in a segregated account with the Fund's custodian to fulfill the
obligation undertaken. The principal reason for writing covered call and put
options is to realize, through the receipt of premiums, a greater return than
would be realized on the underlying securities alone. The Fund receives a
premium from writing covered call or put options which it retains whether or
not the option is exercised.
There is no assurance that sufficient trading interest to create a
liquid secondary market on a securities exchange will exist for any
particular option or at any particular time, and for some options no such
secondary market may exist. A liquid secondary market in an option may cease
to exist for a variety of reasons. In the past, for example, higher than
anticipated trading activity or order flow, or other unforeseen events, at
times have rendered certain of the clearing facilities inadequate and
resulted in the institution of special procedures, such as trading rotations,
restrictions on certain types of orders or trading halts or suspensions in
one or more options. There can be no assurance that similar events, or
events that may otherwise interfere with the timely execution of customers'
orders, will not recur. In such event, it might not be possible to effect
closing transactions in particular options. If, as a covered call option
writer, the Fund is unable to effect a closing purchase transaction in a
secondary market, it will not be able to sell the underlying security until
the option expires or it delivers the underlying security upon exercise or it
otherwise covers its position.
Specific Options Transactions. The Fund may purchase and sell call and put
options in respect of specific securities (or groups or "baskets" of specific
securities) or stock indices listed on national securities exchanges or
traded in the over-the-counter market. An option on a stock index is similar
to an option in respect of specific securities, except that settlement does
not occur by delivery of the securities comprising the index. Instead, the
option holder receives an amount of cash if the closing level of the stock
index upon which the option is based is greater than, in the case of a call,
or less than, in the case of a put, the exercise price of the option. Thus,
the effectiveness of purchasing or writing stock index options will depend
upon price movements in the level of the index rather than the price of a
particular stock.
The Fund may purchase and sell call and put options on foreign currency.
These options convey the right to buy or sell the underlying currency at a
price which is expected to be lower or higher than the spot price of the
currency at the time the option is exercised or expires.
The Fund may purchase cash-settlement options on interest rate swaps,
interest rate swaps denominated in foreign currency and equity index swaps in
pursuit of its investment objective. Interest rate swaps involve the
exchange by the Fund with another party of their respective commitments to
pay or receive interest (for example, an exchange of floating-rate payments
for fixed-rate payments) denominated in U.S. dollars or foreign currency.
Equity index swaps involve the exchange by the Fund with another party of
cash flows based upon the performance of an index or a portion of an index of
securities which usually includes dividends. A cash-settled option on a swap
gives the purchaser the right, but not the obligation, in return for the
premium paid, to receive an amount of cash equal to the value of the
underlying swap as of the exercise date. These options typically are
purchased in privately negotiated transactions from financial institutions,
including securities brokerage firms.
Successful use by the Fund of options will be subject to the ability of
the Manager to predict correctly movements in the prices of individual stocks
or the stock market generally. To the extent such predictions are incorrect,
the Fund may incur losses.
Future Developments. The Fund may take advantage of opportunities in
the area of options and futures contracts and options on futures contracts
and any other Derivatives which are not presently contemplated for use by the
Fund or which are not currently available but which may be developed, to the
extent such opportunities are both consistent with the Fund's investment
objective and legally permissible for the Fund. Before entering into such
transactions or making any such investment, the Fund will provide appropriate
disclosure in its Prospectus or Statement of Additional Information.
Forward Commitments. Securities purchased on a forward commitment or
when-issued basis are subject to changes in value (generally changing in the
same way, i.e., appreciating when interest rates decline and depreciating
when interest rates rise) based upon the public's perception of the
creditworthiness of the issuer and changes, real or anticipated, in the level
of interest rates. Securities purchased on a forward commitment or when-
issued basis may expose the Fund to risks because they may experience such
fluctuations prior to their actual delivery. Purchasing securities on a when-
issued basis can involve the additional risk that the yield available in the
market when the delivery takes place actually may be higher than that
obtained in the transaction itself. Purchasing securities on a forward
commitment or when-issued basis when the Fund is fully or almost fully
invested may result in greater potential fluctuation in the value of the
Fund's net assets and its net asset value per share.
Investment Considerations and Risks
Lower Rated Securities. The Fund is permitted to invest in securities
rated Ba by Moody's Investors Service, Inc. ("Moody's") and BB by Standard &
Poor's Ratings Group ("S&P" and with Moody's, the "Rating Agencies") and as
low as Caa by Moody's or CCC by S&P. Such securities, though higher
yielding, are characterized by risk. See "Description of the
Fund--Investment Considerations and Risks" in the Prospectus for a discussion
of certain risks and "Appendix" for a general description of the Rating
Agencies' ratings. Although ratings may be useful in evaluating the safety
of interest and principal payments, they do not evaluate the market value
risk of these securities. The Fund will rely on the Manager's judgment,
analysis and experience in evaluating the creditworthiness of an issuer.
Investors should be aware that the market values of many of these
securities tend to be more sensitive to economic conditions than are higher
rated securities and will fluctuate over time. These securities are
considered by the Ratings Agencies to be, on balance, predominantly
speculative with respect to capacity to pay interest and repay principal in
accordance with the terms of the obligation and generally will involve more
credit risk than securities in the higher rating categories.
Companies that issue certain of these securities often are highly
leveraged and may not have available to them more traditional methods of
financing. Therefore, the risk associated with acquiring the securities of
such issuers generally is greater than is the case with the higher rated
securities. For example, during an economic downturn or a sustained period
of rising interest rates, highly leveraged issuers of these securities may
experience financial stress and may not have sufficient revenues to meet
their interest payment obligations. The issuer's ability to service its debt
obligations also may be affected adversely by specific corporate developments
or the issuer's inability to meet specific projected business forecasts, or
the unavailability of additional financing. The risk of loss because of
default by the issuer is significantly greater for the holders of these
securities because such securities generally are unsecured and often are
subordinated to other creditors of the issuer.
Because there is no established retail secondary market for many of
these securities, the Manager anticipates that such securities could be sold
only to a limited number of dealers or institutional investors. To the
extent a secondary trading market for these bonds does exist, it generally is
not as liquid as the secondary market for higher rated securities. The lack
of a liquid secondary market may have an adverse impact on market price and
yield and the Fund's ability to dispose of particular issues when necessary
to meet the Fund's liquidity needs or in response to a specific economic
event such as a deterioration in the creditworthiness of the issuer. The
lack of a liquid secondary market for certain securities also may make it
more difficult for the Fund to obtain accurate market quotations for purposes
of valuing the Fund's portfolio and calculating its net asset value. Adverse
publicity and investor perceptions, whether or not based on fundamental
analysis, may decrease the values and liquidity of these securities. In such
cases, judgment may play a greater role in valuation because less reliable,
objective data may be available.
The Fund may acquire these securities during an initial offering. Such
securities may involve special risks because they are new issues. The Fund
has no arrangement with any persons concerning the acquisition of such
securities, and the Manager will review carefully the credit and other
characteristics pertinent to such new issues.
The credit risk factors pertaining to lower rated securities also apply
to lower rated zero coupon securities and pay-in-kind bonds in which the Fund
may invest up to 5% of its net assets. Pay-in-kind bonds pay interest
through the issuance of additional securities. Zero coupon securities and
pay-in-kind bonds carry an additional risk in that, unlike bonds which pay
interest throughout the period to maturity, the Fund will realize no cash
until the cash payment date unless a portion of such securities is sold and,
if the issuer defaults, the Fund may obtain no return at all on its
investment.
Investment Restrictions
The Fund has adopted investment restrictions numbered 1 through 13 as
fundamental policies, which cannot be changed without approval by the holders
of a majority (as defined in the 1940 Act) of the Fund's outstanding voting
shares. Investment restriction number 14 is not a fundamental policy and may
be changed by a vote of a majority of the Fund's Board members at any time.
The Fund may not:
1. Purchase securities of any company having less than three years'
continuous operations (including operations of any predecessors) if such
purchase would cause the value of the Fund's investments in all such
companies to exceed 5% of the value of its total assets.
2. Purchase securities of closed-end investment companies except (a)
in the open market where no commission except the ordinary broker's
commission is paid, which purchases are limited to a maximum of (i) 3% of the
total voting stock of any one closed-end investment company, (ii) 5% of its
net assets with respect to any one closed-end investment company and (iii)
securities shall not be included within this 2% restriction.
14. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid, if,
in the aggregate, more than 15% of the value of the Fund's net assets would
be so invested.
If a percentage restriction is adhered to at the time an investment is
made, a later increase in percentage resulting from a change in values or
assets will not constitute a violation of such restriction.
The Fund may make commitments more restrictive than the restrictions
listed above so as to permit the sale of Fund shares in certain states.
Should the Fund determine that a commitment is no longer in the best
interests of the Fund and its shareholders, the Fund reserves the right to
revoke the commitment by terminating the sale of Fund shares in the state
involved.
MANAGEMENT OF THE FUND
Board members and officers of the Fund, together with information as to
their principal business occupations during at least the last five years, are
shown below. Each Board member who is deemed to be an "interested person" of
the Fund, as defined in the 1940 Act, is indicated by an asterisk.
Board Members of the Fund
*JOSEPH S. DiMARTINO, Chairman of the Board. Since January 1995, Chairman of
the Board of various funds in the Dreyfus Family of Funds. He is also
Chairman of the Board of Directors of Noel Group, Inc., a venture
capital company; and a director of The Muscular Dystrophy Association,
HealthPlan Services Corporation, Belding Heminway Company, Inc., a
manufacturer and marketer of industrial threads and buttons, Curtis
Industries, Inc., a national distributor of security products,
chemicals, and automotive and other hardware, and Staffing Resources,
Inc. For more than five years prior to January 1995, he was President,
a director and, until August 1994, Chief Operating Officer of the
Manager and Executive Vice President and a director of Dreyfus Service
Corporation, a wholly-owned subsidiary of the Manager and, until August
24, 1994, the Fund's distributor. From August 1994 until December 31,
1994, he was a director of Mellon Bank Corporation. Mr. DiMartino is 53
years old and his address is 200 Park Avenue, New York, New York 10166.
*DAVID W. BURKE, Board Member. Chairman of the Broadcasting Board of
Governors, an independent board within the United States Information
Agency, since August 1995. From August 1994 through December 31, 1994,
Mr. Burke was a Consultant to the Manager, and from October 1990 to
August 1994, he was Vice President and Chief Administrative Officer of
the Manager. From 1977 to 1990, Mr. Burke was involved in the management
of national television news, as Vice President and Executive Vice
President of ABC News, and subsequently as President of CBS News. Mr.
Burke is 60 years old and his address is Box 654, Eastham, Massachusetts
02642.
DIANE DUNST, Board Member. Since January 1992, President of Diane Dunst
Promotion, Inc., a full service promotion agency. From January 1989 to
January 1992, Director of Promotion Services, Lear's Magazine. From
1985 to January 1989, she was Sales Promotion Manager of ELLE Magazine.
Ms. Dunst is 57 years old and her address is 1172 Park Avenue, New York,
New York 10128.
ROSALIND GERSTEN JACOBS, Board Member. Director of Merchandise and Marketing
for Corporate Property Investors, a real estate investment company.
From 1974 to 1976, she was owner and manager of a merchandise and
marketing consulting firm. Prior to 1974, she was Vice President of
Macy's, New York. Ms. Jacobs is 71 years old and her address is c/o
Corporate Property Investors, 305 East 47th Street, New York, New York
10017.
JAY I. MELTZER, Board Member. Physician engaged in private practice
specializing in internal medicine. He is also a member of the Advisory
Board of the Section of Society and Medicine, College of Physicians and
Surgeons, Columbia University and Clinical Professor of Medicine,
Department of Medicine, Columbia University College of Physicians and
Surgeons; and Adjunct Clinical Professor of Medicine at Cornell College
of Medicine. Dr. Meltzer is 68 years old and his address is 903 Park
Avenue, New York, New York 10021.
DANIEL ROSE, Board Member. President and Chief Executive Officer of Rose
Associates, Inc., a New York based real estate development and
management firm. In July 1994, Mr. Rose received a Presidential
appointment to serve as a Director of the Baltic-American Enterprise
Fund, which will make equity investments and loans and provide technical
business assistance to new business concerns in the Baltic states. He
is also Chairman of the Housing Committee of The Real Estate Board of
New York, Inc., and a Board Member of Corporate Property Investors, a
real estate investment company. Mr. Rose is 67 years old and his
address is c/o Rose Associates, Inc., 200 Madison Avenue, New York, New
York 10016.
WARREN B. RUDMAN, Board Member. Since January 1993, Partner in the law firm
Paul, Weiss, Rifkind, Wharton & Garrison and since May 1995, a director
of Collins & Aikman Corporation. Also, since January 1993, Mr. Rudman
has served as a director of Chubb Corporation and of the Raytheon
Company, and as Vice Chairman of the President's Foreign Intelligence
Advisory Board. From January 1981 to January 1993, Mr. Rudman served as
a United States Senator from the state of New Hampshire. From January
1993 to December 1994, Mr. Rudman served as Chairman of the Federal
Reserve Bank of Boston. Since 1988, Mr. Rudman has served as a trustee
of Boston College and, since 1986, as a member of the Senior Advisory
Board of the Institute of Politics of the Kennedy School of Government
at Harvard University. Mr. Rudman is 66 years old and his address is
c/o Paul, Weiss, Rifkind, Wharton & Garrison, 1615 L. Street, N.W.,
Washington, D.C. 20036.
SANDER VANOCUR, Board Member. Since January 1994, Mr. Vanocur has served as
a Visiting Professional Scholar at the Freedom Forum First Amendment
Center at Vanderbilt University. Since January 1992, Mr. Vanocur has
been the President of Old Owl Communications, a full-service
communications firm and, since November 1989, he has served as a
director of the Damon Runyon-Walter Winchell Cancer Research Fund. From
June 1986 to December 1991, he was a Senior Correspondent of ABC News
and, from October 1977 to December 1991, he was Anchor of the ABC News
program "Business World," a weekly business program on the ABC
television network. Mr. Vanocur is 68 years old and his address is 2928
P Street, N.W., Washington, D.C. 20007.
The Fund typically pays its Board members an annual retainer and a per
meeting fee and reimburses them for their expenses. The Chairman of the
Board receives an additional 25% of such compensation. Emeritus Board
members are entitled to receive an annual retainer and a per meeting fee of
one-half the amount payable to Board members. The aggregate amount of
compensation paid by the Fund to each Board member for the fiscal year ended
October 31, 1996, and by all other funds in the Dreyfus Family of Funds for
which such person is a Board member (the number of which is set forth in
parentheses next to each Board member's total compensation) for the calendar
year ended December 31, 1996 was as follows:
Total Compensation
From Fund and
Aggregate Fund Complex
Name of Board Compensation from Paid to Board
Member the Fund* Member
David W. Burke $5,000 $253,654 (51)
Joseph S. DiMartino $6,250 $448,618 (94)
Diane Dunst $5,000 $ 39,000 (10)
Rosalind Gersten Jacobs $5,000 $ 92,500 (20)
Jay I. Meltzer $5,000 $ 37,500 (10)
Daniel Rose $5,000 $ 80,250 (21)
Warren B. Rudman $5,000 $ 85,500 (17)
Sander Vanocur $5,000 $ 79,750 (21)
___________________
* Amount does not include reimbursed expenses for attending Board
meetings, which amounted to $583 for all Board members as a group.
There ordinarily will be no meetings of shareholders for the purpose of
electing Board members unless and until such time as less than a majority of
the Board members holding office have been elected by shareholders, at which
time the Board members then in office will call a shareholders' meeting for
the election of Board members. Under the 1940 Act, shareholders of record of
not less than two-thirds of the outstanding shares of the Fund may remove a
Board member through a declaration in writing or by vote cast in person or by
proxy at a meeting called for that purpose. The Board is required to call a
meeting of shareholders for the purpose of voting upon the question of
removal of any such Board member when requested in writing to do so by the
shareholders of record of not less than 10% of the Fund's outstanding shares.
For so long as the Fund's plans described in the section captioned
"Distribution Plan and Shareholder Services Plan" remain in effect, the Board
members of the Fund who are not "interested persons" of the Fund, as defined
in the 1940 Act, will be selected and nominated by the Board members who are
not "interested persons" of the Fund.
Officers of the Fund
MARIE E. CONNOLLY, President and Treasurer. President, Chief Executive
Officer and a director of the Distributor and an officer of other
investment companies advised or administered by the Manager. From
December 1991 to July 1994, she was President and Chief Compliance
Officer of Funds Distributor, Inc., the ultimate parent of which is
Boston Institutional Group, Inc. She is 39 years old.
JOHN E. PELLETIER, Vice President and Secretary. Senior Vice President and
General Counsel of the Distributor and an officer of other investment
companies advised or administered by the Manager. From February 1992 to
July 1994, he served as Counsel for The Boston Company Advisors, Inc.
He is 32 years old.
RICHARD W. INGRAM, Vice President and Assistant Treasurer. Senior Vice
President and Director of Client Services and Treasury Operations of
Funds Distributor, Inc. and an officer of other investment companies
advised or administered by the Manager. From March 1994 to November
1995, he was Vice President and Division Manager for First Data Investor
Services Group. From 1989 to 1994, he was Vice President, Assistant
Treasurer and Tax Director - Mutual Funds of The Boston Company. He is
40 years old.
MARY A. NELSON, Vice President and Assistant Treasurer. Vice President and
Manager of Treasury Services and Administration of Funds Distributor,
Inc. and an officer of other investment companies advised or
administered by the Manager. From September 1989 to July 1994, she was
an Assistant Vice President and Client Manager for The Boston Company,
Inc. She is 32 years old.
DOUGLAS C. CONROY, Vice President and Assistant Secretary. Supervisor of
Treasury Services and Administration of Funds Distributor, Inc. and an
officer of other investment companies advised or administered by the
Manager. From April 1993 to January 1995, he was a Senior Fund
Accountant for Investors Bank & Trust Company. From December 1991 to
March 1993, he was employed as a Fund Accountant at The Boston Company,
Inc. He is 27 years old.
ELIZABETH A. KEELEY, Vice President and Assistant Secretary. Vice President
of the Distributor and an officer of other investment companies advised
or administered by the Manager. She is 27 years old.
MARK A. KARPE, Vice President and Assistant Secretary. Vice President of the
Distributor and an officer of other investment companies advised or
administered by the Manager. Prior to August 1993, he was employed as an
Associate Examiner at the National Association of Securities Dealers,
Inc. He is 27 years old.
JOSEPH F. TOWER, III, Vice President and Assistant Treasurer. Senior Vice
President, Treasurer and Chief Financial Officer of the Distributor and
an officer of other investment companies advised or administered by the
Manager. From July 1988 to August 1994, he was employed by The Boston
Company, Inc. where he held various management positions in the
Corporate Finance and Treasury areas. He is 34 years old.
MICHAEL S. PETRUCELLI, Vice President and Assistant Treasurer. Director of
Strategic Client Initiatives for Funds Distributor, Inc. From December,
1989 through November, 1996 he was employed with GE Investments where he
held various financial, business development and compliance positions.
He also served as Treasurer of the GE Funds and as Director of the GE
Investment Services. He is 35 years old.
The address of each officer of the Fund is 200 Park Avenue, New York,
New York 10166.
The Fund's Board members and officers, as a group, owned less than 1% of
the Fund's shares outstanding on February 18, 1997.
As of February 18, 1997, the following entity was known by the Fund to
own 5% or more of the outstanding voting securities of Class A: Polo Ralph
Lauren Corp., 9 Polito Avenue, Lyndhurst, NJ 07071-3406 (7.99%). As of such
date, the following entities were known by the Fund to own 5% or more of the
outstanding voting securities of Class C, each c/o PaineWebber, 2250
Hawthorne Boulevard #316, Torrance, CA 90505-6831: Trustees of the Michael
Eberhard Trust (38.13%); Trustees of the Frank Matricardi Trust (11.71%);
Trustees of the Jeanne Hogan Trust (11.26%); Trustees of the Kenneth Avery
Trust (10.56%); Trustees of the Stephanie Aguilar Trust (6.90%); Trustees of
the Lynn Schneider Trust (5.18%); and Trustees of the Patricia Baeseman Trust
(5.05%). Also as of such date, the following entities were known by the Fund
to own 5% or more of the outstanding voting securities of Class R: Trent &
Co., c/o Old Kent Bank, 111 Lyon Street NW, Grand Rapids, MI 49503-2406
(55.30%); Premier Mutual Fund Services, Inc., 60 State Street, Suite 1300,
Boston, MA 02109-1803 (32.93%); and FRC Consulting Inc., 7182 Sturnbridge,
West Bloomfield, MI 48322-2935 (11.77%).
MANAGEMENT AGREEMENT
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Management of the Fund."
The Manager provides management services pursuant to the Management
Agreement (the "Agreement") dated August 24, 1994, as amended, with the Fund
which is subject to annual approval by (i) the Fund's Board or (ii) vote of a
majority (as defined in the 1940 Act) of the outstanding voting securities of
the Fund, provided that in either event the continuance also is approved by a
majority of the Board members who are not "interested persons" (as defined in
the 1940 Act) of the Fund or the Manager, by vote cast in person at a meeting
called for the purpose of voting such approval. The Agreement was approved
by shareholders on August 3, 1994, and was last approved by the Fund's Board,
including a majority of the Board members who are not "interested persons" of
any party to the Agreement, at a meeting held on August 5, 1996. The
Agreement is terminable without penalty, on 60 days' notice, by the Fund's
Board or by vote of the holders of a majority of the Fund's shares or, upon
not less than 90 days' notice, by the Manager. The Agreement will terminate
automatically in the event of its assignment (as defined in the 1940 Act).
The following persons are officers and/or directors of the Manager: W.
Keith Smith, Chairman of the Board; Christopher M. Condron, President, Chief
Executive Officer, Chief Operating Officer and a director; Stephen E. Canter,
Vice Chairman, Chief Investment Officer and a director; Lawrence S. Kash,
Vice Chairman--Distribution and a director; William T. Sandalls, Jr., Senior
Vice President and Chief Financial Officer; William F. Glavin, Jr., Vice
President--Corporate Development; Mark N. Jacobs, Vice President--Legal,
General Counsel and Secretary; Patrice M. Kozlowski, Vice-President--
Corporate Communications; Mary Beth Leibig, Vice President--Human Resources;
Jeffrey N. Nachman, Vice President--Mutual Fund Accounting; Andrew S. Wasser,
Vice President--Information Services; Elvira Oslapas, Assistant Secretary;
and Mandell L. Berman, Burton C. Borgelt and Frank V. Cahouet, directors.
The Manager manages the Fund's portfolio of investments in accordance
with the stated policies of the Fund, subject to the approval of the Fund's
Board. The Manager is responsible for investment decisions, and provides
the Fund with portfolio managers who are authorized by the Board to execute
purchases and sales of securities. The Fund's portfolio managers are Timothy
M. Ghriskey, Richard B. Hoey and Wolodymyr Wronskyj. The Manager also
maintains a research department with a professional staff of portfolio
managers and securities analysts who provide research services for the Fund
and for other funds advised by the Manager. All purchases and sales are
reported for the Board's review at the meeting subsequent to such
transactions.
The Manager maintains office facilities on behalf of the Fund, and
furnishes statistical and research data, clerical help, accounting, data
processing, bookkeeping and internal auditing and certain other required
services to the Fund. The Manager also may make such advertising and
promotional expenditures, using its own resources, as it from time to time
deems appropriate.
All expenses incurred in the operation of the Fund are borne by the
Fund, except to the extent specifically assumed by the Manager. The expenses
borne by the Fund include: taxes, interest, loan commitment fees, dividends
and interest paid on securities sold short, brokerage fees and commissions,
if any, fees of Board members who are not officers, directors, employees or
holders of 5% or more of the outstanding voting securities of the Manager,
Securities and Exchange Commission fees, state Blue Sky qualification fees,
advisory fees, charges of custodians, transfer and dividend disbursing
agents' fees, certain insurance premiums, industry association fees, outside
auditing and legal expenses, costs of maintaining the Fund's existence, costs
of independent pricing services, costs attributable to investor services
(including, without limitation, telephone and personnel expenses), costs of
preparing and printing prospectuses and statements of additional information
for regulatory purposes and for distribution to existing shareholders, costs
of shareholders' reports and meetings and any extraordinary expenses. Class
B and Class C shares are subject to an annual distribution fee and Class A,
Class B and Class C shares are subject to an annual service fee. See
"Distribution Plan and Shareholder Services Plan."
As compensation for its services, the Fund has agreed to pay the Manager
a monthly management fee at the annual rate of .75 of 1% of the value of the
Fund's average daily net assets. For the fiscal years ended October 31,
1994, 1995 and 1996, the management fees paid by the Fund amounted to
$2,259,762, $1,953,914 and $1,948,566, respectively.
The Manager has agreed that if, in any fiscal year, the aggregate
expenses of the Fund, exclusive of taxes, brokerage, interest on borrowings
and (with the prior written consent of the necessary state securities
commissions) extraordinary expenses, but including the management fee, exceed
the expense limitation of any state having jurisdiction over the Fund, the
Fund may deduct from the payment to be made to the Manager under the
Agreement, or the Manager will bear, such excess expense to the extent
required by state law. Such deduction or payment, if any, will be estimated
daily, and reconciled and effected or paid, as the case may be, on a monthly
basis.
The aggregate of the fees payable to the Manager is not subject to
reduction as the value of the Fund's net assets increases.
PURCHASE OF SHARES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Buy Shares."
The Distributor. The Distributor serves as the Fund's distributor on a
best efforts basis pursuant to an agreement which is renewable annually. The
Distributor also acts as distributor for the other funds in the Dreyfus
Premier Family of Funds, for funds in the Dreyfus Family of Funds and for
certain other investment companies. In some states, certain financial
institutions effecting transactions in Fund shares may be required to
register as dealers pursuant to state law.
For the period from August 24, 1994 through October 31, 1994 and for the
fiscal years ended October 31, 1995 and 1996, the Distributor retained
$1,701, $8,880 and $6,137, respectively, from sales loads on Fund shares.
For the period from November 1, 1993 through August 23, 1994, Dreyfus Service
Corporation, as the Fund's distributor during such period, retained $297,139
from sales loads on Fund shares.
Sales Loads--Class A. The scale of sales loads applies to purchases of
Class A shares made by any "purchaser," which term includes an individual
and/or spouse purchasing securities for his, her or their own account or for
the account of any minor children, or a trustee or other fiduciary purchasing
securities for a single trust estate or a single fiduciary account trust
estate or a single fiduciary account (including a pension, profit-sharing or
other employee benefit trust created pursuant to a plan qualified under
Section 401 of the Internal Revenue Code of 1986, as amended (the "Code"))
although more than one beneficiary is involved; or a group of accounts
established by or on behalf of the employees of an employer or affiliated
employers pursuant to an employee benefit plan or other program (including
accounts established pursuant to Sections 403(b), 408(k), and 457 of the
Code); or an organized group which has been in existence for more than six
months, provided that it is not organized for the purpose of buying
redeemable securities of a registered investment company and provided that
the purchases are made through a central administration or a single dealer,
or by other means which result in economy of sales effort or expense.
Set forth below is an example of the method of computing the offering
price of the Fund's Class A shares. The example assumes a purchase of Class
A shares of the Fund aggregating less than $50,000 subject to the current
schedule of sales charges set forth in the Fund's Prospectus at a price based
upon the net asset value of the Fund's Class A shares on October 31, 1996:
Net Asset Value per Share $22.42
Per Share Sales Charge - 5.75%*
of offering price (6.10% of
net asset value per share) $ 1.37
Per share Offering Price to $23.79
the Public
_________________________
* Class A shares purchased by shareholders beneficially owning Class A
shares on November 30, 1996 are subject to a different sales load schedule as
described under "How to Buy Shares--Class A Shares" in the Fund's Prospectus.
TeleTransfer Privilege. TeleTransfer purchase orders may be made at any
time. Purchase orders received by 4:00 p.m., New York time, on any business
day that Dreyfus Transfer, Inc., the Fund's transfer and dividend disbursing
agent (the "Transfer Agent"), and the New York Stock Exchange are open for
business will be credited to the shareholder's Fund account on the next bank
business day following such purchase order. Purchase orders made after 4:00
p.m., New York time, on any business day the Transfer Agent and the New York
Stock Exchange are open for business, or orders made on Saturday or any Fund
holiday (e.g., when the New York Stock Exchange is not open for business),
will be credited to the shareholder's Fund account on the second bank
business day following such purchase order. To qualify to use TeleTransfer,
payments for purchase of Fund shares must be drawn on, and redemption
proceeds paid to, the same bank and account as is designated on the Account
Application or Shareholder Services Form on file. If the proceeds of a
particular redemption are to be wired to an account at any other bank, the
request must be in writing and signature-guaranteed. See also "Redemption
of Shares--TeleTransfer Privilege."
DISTRIBUTION PLAN AND SHAREHOLDER SERVICES PLAN
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Distribution Plan and
Shareholder Services Plan."
Class B and Class C shares are subject to a Distribution Plan and Class
A, Class B and Class C shares are subject to a Shareholder Services Plan.
Distribution Plan. Rule 12b-1 (the "Rule") adopted by the Securities
and Exchange Commission under the 1940 Act, provides, among other things,
that an investment company may bear expenses of distributing its shares only
pursuant to a plan adopted in accordance with the Rule. The Fund's Board has
adopted such a plan (the "Distribution Plan") with respect to Class B and
Class C shares, pursuant to which the Fund pays the Distributor for
distributing the Fund's Class B and Class C shares. The Fund's Board
believes that there is a reasonable likelihood that the Distribution Plan
will benefit the Fund and the holders of Class B and Class C shares.
A quarterly report of the amounts expended under the Distribution Plan,
and the purposes for which such expenditures were incurred, must be made to
the Board for its review. In addition, the Distribution Plan provides that
it may not be amended to increase materially the costs which holders of Class
B or Class C shares may bear for distribution pursuant to the Distribution
Plan without the approval of such shares and that other material amendments
of the Distribution Plan must be approved by the Board, and by the Board
members who are not "interested persons" (as defined in the 1940 Act) of the
Fund and have no direct or indirect financial interest in the operation of
the Distribution Plan or in any agreements entered into in connection with
the Distribution Plan by vote of the Board members cast in person at a
meeting called for the purpose of considering such amendments. The
Distribution Plan is subject to annual approval by such vote of the Board
members cast in person at a meeting called for the purpose of voting on the
Distribution Plan. The Distribution Plan was last so approved by the Board
at a meeting held on August 5, 1996. As to each such Class of shares, the
Distribution Plan may be terminated at any time by vote of a majority of the
Board members who are not "interested persons" and have no direct or indirect
financial interest in the operation of the Distribution Plan or in any
agreements entered into in connection with the Distribution Plan or by vote
of the holders of a majority of such Class of shares.
For the fiscal year ended October 31, 1996, the Fund paid the
Distributor $340,572 with respect to Class B and [$85] with respect to Class
C under the Distribution Plan.
Shareholder Services Plan. The Fund has adopted a Shareholder Services
Plan, pursuant to which the Fund pays the Distributor for the provision of
certain services to the holders of Class A, Class B and Class C shares. The
services provided may include personal services relating to shareholder
accounts, such as answering shareholder inquiries regarding the Fund and
providing reports and other information, and services related to the
maintenance of such shareholder accounts. Under the Shareholder Services
Plan, the Distributor may make payments to certain financial institutions,
securities dealers and other financial industry professionals (collectively,
"Service Agents") in respect of these services.
A quarterly report of the amounts expended under the Shareholder
Services Plan, and the purposes for which such expenditures were incurred,
must be made to the Board for its review. In addition, the Shareholder
Services Plan provides that material amendments must be approved by the
Fund's Board, and by the Board members who are not "interested persons" (as
defined in the 1940 Act) of the Fund and have no direct or indirect financial
interest in the operation of the Shareholder Services Plan or in any
agreements entered into in connection with the Shareholder Services Plan, by
vote cast in person at a meeting called for the purpose of considering such
amendments. The Shareholder Services Plan is subject to annual approval by
such vote of the Board members cast in person at a meeting called for the
purpose of voting on the Shareholder Services Plan. The Shareholder Services
Plan was last so approved on August 5, 1996. As to each such Class of
shares, the Shareholder Services Plan is terminable at any time by vote of a
majority of the Board members who are not "interested persons" and who have
no direct or indirect financial interest in the operation of the Shareholder
Services Plan or in any agreements entered into in connection with the
Shareholder Services Plan.
For the fiscal year ended October 31, 1996, the Fund paid the
Distributor $535,964 with respect to Class A shares, $113,524 with respect to
Class B shares, and [$28] with respect to Class C shares pursuant to the
Shareholder Services Plan.
REDEMPTION OF SHARES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Redeem Shares."
Wire Redemption Privilege. By using this Privilege, the investor
authorizes the Transfer Agent to act on wire or telephone redemption
instructions from any person representing himself or herself to be the
investor, or a representative of the investor's Service Agent, and reasonably
believed by the Transfer Agent to be genuine. Ordinarily, the Fund will
initiate payment for shares redeemed pursuant to this Privilege on the next
business day after receipt by the Transfer Agent of the redemption request in
proper form. Redemption proceeds ($1,000 minimum) will be transferred by
Federal Reserve wire only to the commercial bank account specified by the
investor on the Account Application or Shareholder Services Form, or to a
correspondent bank if the investor's bank is not a member of the Federal
Reserve System. Fees ordinarily are imposed by such bank and are borne by
the investor. Immediate notification by the correspondent bank to the
investor's bank is necessary to avoid a delay in crediting the funds to the
investor's bank account.
Investors with access to telegraphic equipment may wire redemption
requests to the Transfer Agent by employing the following transmittal code
which may be used for domestic or overseas transmissions:
Transfer Agent's
Transmittal Code Answer Back Sign
144295 144295 TSSG PREP
Investors who do not have direct access to telegraphic equipment may
have the wire transmitted by contacting a TRT Cables operator at 1-800-654-
7171, toll free. Investors should advise the operator that the above
transmittal code must be used and should also inform the operator of the
Transfer Agent's answer back sign.
To change the commercial bank or account designated to receive wire
redemption proceeds, a written request must be sent to the Transfer Agent.
This request must be signed by each shareholder, with each signature
guaranteed as described below under "Share Certificates; Signatures."
TeleTransfer Privilege. Investors should be aware that if they have
selected the TeleTransfer Privilege, any request for a wire redemption will
be effected as a TeleTransfer transaction through the Automated Clearing
House ("ACH") system unless more prompt transmittal is specifically
requested. Redemption proceeds will be on deposit in the investor's account
in an ACH member bank ordinarily two business days after receipt of the
redemption request. See "Purchase of Shares--TeleTransfer Privilege."
Share Certificates; Signatures. Any certificates representing Fund
shares to be redeemed must be submitted with the redemption request. Written
redemption requests must be signed by each shareholder, including each holder
of a joint account, and each signature must be guaranteed. Signatures on
endorsed certificates submitted for redemption also must be guaranteed. The
Transfer Agent has adopted standards and procedures pursuant to which
signature-guarantees in proper form generally will be accepted from domestic
banks, brokers, dealers, credit unions, national securities exchanges,
registered securities associations, clearing agencies and savings
associations, as well as from participants in the New York Stock Exchange
Medallion Signature Program, the Securities Transfer Agents Medallion Program
("STAMP"), and the Stock Exchanges Medallion Program. Guarantees must be
signed by an authorized signatory of the guarantor and "Signature-Guaranteed"
must appear with the signature. The Transfer Agent may request additional
documentation from corporations, executors, administrators, trustees or
guardians and may accept other suitable verification arrangements from
foreign investors, such as consular verification. For more information with
respect to signature-guarantees, please contact your Service Agent.
Redemption Commitment. The Fund has committed itself to pay in cash all
redemption requests by any shareholder of record, limited in amount during
any 90-day period to the lesser of $250,000 or 1% of the value of the Fund's
net assets at the beginning of such period. Such commitment is irrevocable
without the prior approval of the Securities and Exchange Commission. In the
case of requests for redemption in excess of such amount, the Fund's Board
reserves the right to make payments in whole or part in securities (which may
include non-marketable securities) or other assets of the Fund in case of an
emergency or any time a cash distribution would impair the liquidity of the
Fund to the detriment of the existing shareholders. In such event, the
securities would be valued in the same manner as the Fund's portfolio is
valued. If the recipient sold such securities, brokerage charges would be
incurred.
Suspension of Redemption. The right of redemption may be suspended or
the date of payment postponed (a) during any period when the New York Stock
Exchange is closed (other than customary weekend and holiday closings), (b)
when trading in the markets the Fund ordinarily utilizes is restricted, or
when an emergency exists as determined by the Securities and Exchange
Commission so that disposal of the Fund's investments or determination of its
net asset value is not reasonably practicable, or (c) for such other periods
as the Securities and Exchange Commission by order may permit to protect the
Fund's shareholders.
SHAREHOLDER SERVICES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Shareholder Services."
Fund Exchanges. Shares of any Class of the Fund may be exchanged for
shares of the respective Class of certain other funds advised or administered
by the Manager. Shares of the same Class of such other funds purchased by
exchange will be purchased on the basis of relative net asset value per share
as follows:
A. Exchanges for shares of funds offered without a sales load will be
made without a sales load.
B. Shares of funds purchased without a sales load may be exchanged for
shares of other funds sold with a sales load, and the applicable
sales load will be deducted.
C. Shares of funds purchased with a sales load may be exchanged without
a sales load for shares of other funds sold without a sales load.
D. Shares of funds purchased with a sales load, shares of funds acquired
by a previous exchange from shares purchased with a sales load, and
additional shares acquired through reinvestment of dividends or
distributions of any such funds (collectively referred to herein as
"Purchased Shares") may be exchanged for shares of other funds sold
with a sales load (referred to herein as "Offered Shares"), provided
that, if the sales load applicable to the Offered Shares exceeds the
maximum sales load that could have been imposed in connection with
the Purchased Shares (at the time the Purchased Shares were
acquired), without giving effect to any reduced loads, the difference
will be deducted.
E. Shares of funds subject to a contingent deferred sales charge ("CDSC")
that are exchanged for shares of another fund will be subject to the
higher applicable CDSC of the two funds and, for purposes of
calculating CDSC rates and conversion periods, if any, will be deemed
to have been held since the date the shares being exchanged were
initially purchased.
To accomplish an exchange under item D above, shareholders must notify
the Transfer Agent of their prior ownership of fund shares and their account
number.
To request an exchange, the investor's Service Agent acting on the
investor's behalf must give exchange instructions to the Transfer Agent in
writing or by telephone. The ability to issue exchange instructions by
telephone is given to all Fund shareholders automatically, unless the
investor checks the applicable "No" box on the Account Application, indicated
that the investor specifically refuses this privilege. By using the
Telephone Exchange Privilege, the investor authorizes the Transfer Agent to
act on telephone exchange instructions (including over The Dreyfus Touchr
automated telephone system) from any person representing himself or herself
to be the investor, or a representative of the investor's Service Agent, and
reasonably believed by the Transfer Agent to be genuine. Telephone exchanges
may be subject to limitations as to the amount involved or the number of
telephone exchanges permitted. Shares issued in certificate form are not
eligible for telephone exchange.
Exchanges of Class R shares held by a Retirement Plan may be made only
between the investor's Retirement Plan account in one fund and such
investor's Retirement Plan account in another fund.
To establish a personal retirement plan by exchange, shares of the fund
being exchanged must have a value of at least the minimum initial investment
required for shares of the fund into which the exchange is being made. For
Dreyfus-sponsored Keogh Plans, IRAs and IRAs set up under a Simplified
Employee Pension Plan ("SEP-IRAs") with only one participant, the minimum
initial investment is $750. To exchange shares held in corporate plans,
403(b)(7) Plans and SEP-IRAs with more than one participant, the minimum
initial investment is $100 if the plan has at least $2,500 invested among
shares of the same Class of the funds in the Premier Family of Fund or the
Dreyfus Family of Funds. To exchange shares held in a personal retirement
plan account, the shares exchanged must have a current value of at least
$100.
Auto-Exchange Privilege. The Auto-Exchange Privilege permits an
investor to purchase, in exchange for shares of the Fund, shares of the same
Class of another fund in the Premier Family of Funds or the Dreyfus Family of
Funds. This Privilege is available only for existing accounts. With respect
to Class R shares held by a Retirement Plan, exchanges may be made only
between the investor's Retirement Plan account in one fund and such
investor's Retirement Plan account in another fund. Shares will be exchanged
on the basis of relative net asset value as described above under "Fund
Exchanges." Enrollment in or modification or cancellation of this Privilege
is effective three business days following such notification by the investor.
An investor will be notified if his account falls below the amount designated
under this Privilege. In this case, an investor's account will fall to zero
unless additional investments are made in excess of the designated amount
prior to the next Auto-Exchange transaction. Shares held under IRA and other
retirement plans are eligible for this Privilege. Exchanges of IRA shares
may be made between IRA accounts and from regular accounts to IRA accounts,
but not from IRA accounts to regular accounts. With respect to all other
retirement accounts, exchanges may be made among those accounts.
Fund Exchanges and the Auto-Exchange Privilege are available to
shareholders resident in any state in which shares of the fund being acquired
may legally be sold. Shares may be exchanged only between accounts having
identical names and other identifying designations.
Shareholder Services Forms and prospectuses of the other funds may be
obtained by calling 1-800-554-4611. The Fund reserves the right to reject
any exchange request in whole or in part. The Fund Exchanges service or the
Auto-Exchange Privilege may be modified or terminated at any time upon notice
to shareholders.
Automatic Withdrawal Plan. The Automatic Withdrawal Plan permits an
investor with a $5,000 minimum account to request withdrawal of a specified
dollar amount (minimum of $50) on either a monthly or quarterly basis.
Withdrawal payments are the proceeds from sales of Fund shares, not the yield
on the shares. If withdrawal payments exceed reinvested dividends and
distributions, the investor's shares will be reduced and eventually may be
depleted. Automatic Withdrawal may be terminated at any time by the
investor, the Fund or the Transfer Agent. Shares for which certificates have
been issued may not be redeemed through the Automatic Withdrawal Plan.
Dividend Sweep. Dividend Sweep allows investors to invest automatically
their dividends or dividends and capital gains distributions, if any, from
the Fund in shares of the same Class of another fund in the Dreyfus Premier
Family of Funds or the Dreyfus Family of Funds of which the investor is a
shareholder. Shares of the same Class of other funds purchased pursuant to
this Privilege will be purchased on the basis of relative net asset value per
share as follows:
A. Dividends and distributions paid by a fund may be invested
without imposition of a sales load in shares of other funds offered
without a sales load.
B. Dividends and distributions paid by a fund which does not
charge a sales load may be invested in shares of other funds sold
with a sales load, and the applicable sales load will be deducted.
C. Dividends and distributions paid by a fund which charges a
sales load may be invested in shares of other funds sold with a
sales load (referred to herein as "Offered Shares"), provided that,
if the sales load applicable to the Offered Shares exceeds the
maximum sales load charged by the fund from which dividends or
distributions are being swept, without giving effect to any reduced
loads, the difference will be deducted.
D. Dividends and distributions paid by a fund may be invested in
shares of other funds that impose a CDSC and the applicable CDSC,
if any, will be imposed upon redemption of such shares.
Corporate Pension/Profit-Sharing and Personal Retirement Plans. The
Fund makes available to corporations a variety of prototype pension and
profit-sharing plans, including a 401(k) Salary Reduction Plan. In addition,
the Fund makes available Keogh Plans, IRAs, including SEP-IRAs and IRA
"Rollover Accounts," and 403(b)(7) Plans. Plan support services are also
available.
Investors who wish to purchase Fund shares in conjunction with a Keogh
Plan, a 403(b)(7) Plan or an IRA, including a SEP-IRA, may request from the
Distributor forms for adoption of such plans.
The entity which acts as custodian may charge a fee for Keogh Plans,
403(b)(7) Plans or IRAs, payment of which could require the liquidation of
shares. All fees charged are described in the appropriate form.
Shares may be purchased in connection with these plans only by direct
remittance to the entity which acts as custodian. Purchases for these plans
may not be made in advance of receipt of funds.
The minimum initial investment for corporate plans, Salary Reduction
Plans, 403(b)(7) Plans, and SEP-IRAs, with more than one participant, is
$2,500, with no minimum on subsequent purchases. The minimum initial
investment for Dreyfus-sponsored Keogh Plans, IRAs, SEP-IRAs, and 403(b)(7)
Plans with only one participant is ordinarily $750, with no minimum on
subsequent purchases. Individuals who open an IRA also may open a
non-working spousal IRA with a minimum investment of $250.
The investor should read the prototype retirement plan and the
appropriate form of custodial agreement for further details as to
eligibility, service fees and tax implications, and should consult a tax
adviser.
DETERMINATION OF NET ASSET VALUE
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Buy Shares."
Valuation of Portfolio Securities. Portfolio securities, including
covered call options written by the Fund, are valued at the last sale price
on the securities exchange or national securities market on which such
securities primarily are traded. Securities not listed on an exchange or
national securities market, or securities in which there were no
transactions, are valued at the average of the most recent bid and asked
prices, except in the case of open short positions where the asked price is
used for valuation purposes. Bid price is used when no asked price is
available. Market quotations for foreign securities in foreign currencies
are translated into U.S. dollars at the prevailing rates of exchange. Short-
term investments are carried at amortized cost, which approximates value.
Expenses and fees of the Fund, including the management fee paid by the Fund
and the distribution and shareholder services fees, as applicable, are
accrued daily and taken into account for the purpose of determining the net
asset value of the relevant Class' shares. Because of the differences in
operating expenses incurred by each Class, the per share net asset value of
each Class will differ.
Restricted securities, as well as securities or other assets for which
market quotations are not readily available, or are not valued by a pricing
service approved by the Fund's Board, are valued at fair value as determined
in good faith by the Board. The Fund's Board will review the method of
valuation on a current basis. In making their good faith valuation of
restricted securities, the Board members generally will take the following
factors into consideration: restricted securities which are, or are
convertible into, securities of the same class of securities for which a
public market exists usually will be valued at market value less the same
percentage discount at which purchased. This discount will be revised
periodically by the Board if the Board members believe that it no longer
reflects the value of the restricted securities. Restricted securities not
of the same class as securities for which a public market exists usually will
be valued initially at cost. Any subsequent adjustment from cost will be
based upon considerations deemed relevant by the Fund's Board.
New York Stock Exchange Closings. The holidays (as observed) on which
the New York Stock Exchange is closed currently are: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving and Christmas.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Dividends, Distributions
and Taxes."
Management of the Fund believes that the Fund has qualified for the
fiscal year ended October 31, 1996 as a "regulated investment company" under
the Code. The Fund intends to continue to so qualify, if such qualification
is in the best interests of its shareholders. As a regulated investment
company, the Fund will pay no Federal income tax on net investment income and
net realized capital gains to the extent that such income and gains are
distributed to shareholders in accordance with the applicable provisions of
the Code. As a regulated investment company, the Fund will pay no Federal
income tax on net investment income and net realized securities gains to the
extent that such income and gains are distributed to shareholders in
accordance with applicable provisions of the Code. The term "regulated
investment company" does not imply the supervision of management or
investment practices or policies by any government agency.
Depending upon the composition of the Fund's income, the entire amount
or a portion of the dividends paid by the Fund from net investment income may
qualify for the dividends received deduction allowable to qualifying U.S.
corporate shareholders ("dividends received deduction"). In general,
dividend income of the Fund distributed to qualifying corporate shareholders
will be eligible for the dividends received deduction only to the extent that
the Fund's income consists of dividends paid by U.S. corporations. However,
Section 246(c) of the Code provides that if a qualifying corporate
shareholder has disposed of Fund shares not held for 46 days or more and has
received a dividend from net investment income with respect to such shares,
the portion designated by the Fund as qualifying for the dividends received
deduction will not be eligible for such shareholder's dividends received
deduction. In addition, the Code provides other limitations with respect to
the ability of a qualifying corporate shareholder to claim the dividends
received deduction in connection with holding Fund shares.
The Fund may qualify for and may make an election permitted under
Section 853 of the Code so that shareholders may be eligible to claim a
credit or deduction on their Federal income tax returns for, and will be
required to treat as part of the amounts distributed to them, their pro rata
portion of qualified taxes paid or incurred by the Fund to foreign countries
(which taxes relate primarily to investment income). The Fund may make an
election under Section 853, provided that more than 50% of the value of the
Fund's total assets at the close of the taxable year consists of securities
in foreign corporations, and the Fund satisfies the applicable distribution
provisions of the Code. The foreign tax credit available to shareholders is
subject to certain limitations imposed by the Code.
Ordinarily, gains and losses realized from portfolio transactions will
be treated as capital gains or losses. However, a portion of the gain or
loss realized from the disposition of non-U.S. dollar denominated securities
(including debt instruments, certain financial forwards, futures and options,
and certain preferred stock) may be treated as ordinary income or loss under
Section 988 of the Code. In addition, all or a portion of the gain realized
from the disposition of certain market discount bonds will be treated as
ordinary income under Section 1276 of the Code. Finally, all or a portion of
the gain realized from engaging in "conversion transactions" may be treated
as ordinary income under Section 1258 of the Code. "Conversion transactions"
are defined to include certain forward, futures, option and straddle
transactions, transactions marketed or sold to produce capital gains, or
transactions described in Treasury regulations to be issued in the future.
Under Section 1256 of the Code, gain or loss realized by the Fund from
certain financial futures or forward contracts and certain options
transactions (other than those taxed under Section 988 of the Code) will be
treated as 60% long-term capital gain or loss and 40% short-term capital gain
or loss. Gain or loss will arise upon exercise or lapse of such futures,
forwards and options as well as from closing transactions. In addition, any
such futures, forwards or options remaining unexercised at the end of the
Fund's taxable year will be treated as sold for their then fair market value,
resulting in additional gain or loss to the Fund characterized in the manner
described in the Fund's Prospectus.
Offsetting positions held by the Fund involving certain forwards or
futures contracts or options transactions may be considered, for tax
purposes, to constitute "straddles." "Straddles" are defined to include
"offsetting positions" in actively traded personal property. The tax
treatment of "straddles" is governed by Sections 1092 and 1258 of the Code,
which, in certain circumstances, overrides or modifies the provisions of
Sections 988 and 1256 of the Code. As such, all or a portion of any short-or
long-term capital gain from certain "straddle" transactions may be
recharacterized to ordinary income.
If the Fund were treated as entering into "straddles" by reason of its
engaging in financial forward or futures contracts or options transactions,
such "straddles" would be characterized as "mixed straddles" if the futures,
forwards or options comprising a part of such "straddles" were governed by
Section 1256 of the Code. The Fund may make one or more elections with
respect to "mixed straddles." If no election is made, to the extent the
straddle rules apply to positions established by the Fund, losses realized by
the Fund will be deferred to the extent of unrealized gain in any offsetting
positions. Moreover, as a result of the straddle and conversion transaction
rules, short-term capital loss on straddle positions may be recharacterized
as long-term capital loss, and long-term capital gain may be recharacterized
as short-term capital gain or ordinary income.
Investment by the Fund in securities issued or acquired at a discount or
providing for deferred interest or for payment of interest in the form of
additional obligations could, under special tax rules, affect the amount,
timing and character of distributions to shareholders. For example, the Fund
could be required to take into account annually a portion of the discount (or
deemed discount) at which such securities were issued and to distribute such
portion in order to maintain its qualification as a regulated investment
company. In such case, the Fund may have to dispose of securities which it
might otherwise have continued to hold in order to generate cash to satisfy
these distribution requirements.
PORTFOLIO TRANSACTIONS
The Manager supervises the placement of orders on behalf of the Fund for
the purchase or sale of portfolio securities. Allocation of brokerage
transactions, including their frequency, is made in the best judgment of the
Manager and in a manner deemed fair and reasonable to shareholders. The
primary consideration is prompt execution of orders at the most favorable net
price. Subject to this consideration, the brokers selected include those
that supplement the Manager's research facilities with statistical data,
investment information, economic facts and opinions. Information so received
is in addition to and not in lieu of services required to be performed by the
Manager and the fee of the Manager is not reduced as a consequence of the
receipt of such supplemental information. Such information may be useful to
the Manager in serving both the Fund and other funds which it manages and,
conversely, supplemental information obtained by the placement of business of
other clients may be useful to the Manager in carrying out its obligation to
the Fund. Brokers also are selected because of their ability to handle
special executions such as are involved in large block trades or broad distri
butions, provided the primary consideration is met. Large block trades may,
in certain cases, result from two or more funds managed by the Manager being
engaged simultaneously in the purchase or sale of the same security. Certain
of the Fund's transactions in securities of foreign issuers may not benefit
from the negotiated commission rates available to the Fund for transactions
in securities of domestic issuers.
Portfolio turnover may vary from year to year, as well as within a year.
The Fund's portfolio turnover rate for the fiscal year ended October 31, 1996
was 147.64%. High turnover rates are likely to result in comparatively
greater brokerage expenses. The overall reasonableness of brokerage
commissions paid is evaluated by the Manager based upon its knowledge of
available information as to the general level of commissions paid by other
institutional investors for comparable services. For the fiscal years ended
October 31, 1994, 1995 and 1996, the Fund paid total brokerage commissions of
$2,132,968, $1,606,070, and $1,089,978, respectively, none of which was paid
to the Distributor. The above figures for brokerage commissions paid do not
include gross spreads and concessions on principal transactions which, where
determinable, amounted to $1,381,585, $1,460,787 and $921,004, in fiscal
1994, 1995 and 1996, respectively, none of which was paid to the Distributor.
PERFORMANCE INFORMATION
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Performance Information."
The average annual total returns for Class A shares for the 1-, 5, and
10-year periods ended October 31, 1996 were 10.72%, 6.33% and 11.93%,
respectively. The average annual total returns for Class B shares for the 1-
year period ended October 31, 1996 and for the period January 15, 1993
(inception of Class B) through October 31, 1996, were 11.05% and 6.72%,
respectively.
Average annual total return is calculated by determining the ending
redeemable value of an investment purchased at net asset value (maximum
offering price in the case of Class A) per share with a hypothetical $1,000
payment made at the beginning of the period (assuming the reinvestment of
dividends and distributions), dividing by the amount of the initial
investment, taking the "n"th root of the quotient (where "n" is the number of
years in the period) and subtracting one from the result. A Class's average
annual total return figures calculated in accordance with such formula assume
that in the case of Class A the maximum sales load has been deducted from the
hypothetical initial investment at the time of purchase or, in the case of
Class B or Class C, the maximum applicable CDSC has been paid upon redemption
at the end of the period.
The total return for Class A for the period October 16, 1986
(commencement of operations) through October 31, 1996, based on the maximum
offering price per share, was 209.75%. Based on net asset value per share,
the total return for Class A was 224.32% for this period. The total return
for Class B for the period January 15, 1993 (commencement of initial
offering) through October 31, 1996, after giving effect to the maximum
applicable CDSC, was 27.98%. Without giving effect to the maximum applicable
CDSC, the total return for Class B was 30.98% for this period. For Class C
shares (after giving effect to the maximum applicable CDSC) and Class R
shares, respectively, for the period September 1, 1995 (commencement of
initial offering of Class C and Class R shares) through October 31, 1996,
total return was 15.47% and 16.17%. Without giving effect to the maximum
applicable CDSC, total return for Class C shares for this period was 15.47%.
Total return is calculated by subtracting the amount of the Fund's net
asset value (maximum offering price in the case of Class A) per share at the
beginning of a stated period from the net asset value (maximum offering price
in the case of Class A) per share at the end of the period (after giving
effect to the reinvestment of dividends and distributions during the period
and any applicable CDSC), and dividing the result by the net asset value
(maximum offering price in the case of Class A) per share at the beginning of
the period. Total return also may be calculated based on the net asset value
per share at the beginning of the period instead of the maximum offering
price per share at the beginning of the period for Class A shares or without
giving effect to any applicable CDSC at the end of the period for Class B or
Class C shares. In such cases, the calculation would not reflect the
deduction of the sales load with respect to Class A shares or any applicable
CDSC with respect to Class B or Class C shares, which, if reflected, would
reduce the performance quoted.
Comparative performance may be used from time to time in advertising the
Fund's shares, including data from Lipper Analytical Services, Inc., Standard
& Poor's 500 Composite Stock Price Index, the Dow Jones Industrial Average,
Money Magazine, Morningstar, Inc., Value Line, Inc., Ibbotson Associates, and
other industry publications. From time to time, the Fund may compare its
performance against inflation with the performance of other instruments
against inflation, such as short-term Treasury Bills (which are direct
obligations of the U.S. Government) and FDIC-insured bank money market
accounts. In addition, advertising for the Fund may indicate that investors
may consider diversifying their investment portfolios in order to seek
protection of the value of their assets against inflation.
Advertising materials for the Fund may include reference to the role
played by the Manager or Jack J. Dreyfus, Jr. in popularizing the concept of
mutual funds as an investment vehicle and may refer to the role The Dreyfus
Corporation and the Dreyfus Family of Funds play or have played in the mutual
fund industry, and the fact that the mutual fund industry, which includes
Dreyfus and the Dreyfus funds, has, through the wide variety of innovative
and democratic mutual fund products it has made available, brought to the
public investment opportunities once reserved for the few. Advertising
materials may also refer to various Dreyfus investor services, including, for
example, asset allocation, retirement planning, college planning and IRA
rollover services. From time to time advertising materials for the Fund also
may refer to Morningstar or Value Line ratings and related analyses
supporting the rating. In addition, advertising material for the Fund may,
from time to time, include biographical information relating to its portfolio
manager and may refer to, or include commentary by the portfolio manager
relating to investment strategy, value investing generally, asset growth,
current or past business, political, economic or financial conditions and
other matters of general interest to investors.
INFORMATION ABOUT THE FUND
The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "General Information."
Each Fund share has one vote and, when issued and paid for in accordance
with the terms of the offering, is fully paid and non-assessable. Fund
shares have no preemptive or subscription rights and are freely transferable.
The Fund sends annual and semi-annual financial statements to all its
shareholders.
TRANSFER AND DIVIDEND DISBURSING AGENT, CUSTODIAN,
COUNSEL AND INDEPENDENT AUDITORS
Dreyfus Transfer, Inc., a wholly-owned subsidiary of the Manager, P.O.
Box 9671, Providence, Rhode Island 02940-9671, is the Fund's transfer and
dividend disbursing agent. Under a transfer agency agreement with the Fund,
the Transfer Agent arranges for the maintenance of shareholder account
records for the Fund, the handling of certain communications between
shareholders and the Fund and the payment of dividends and distributions
payable by the Fund. For these services, the Transfer Agent receives a
monthly fee computed on the basis of the number of shareholder accounts it
maintains for the Fund during the month, and is reimbursed for certain out-of-
pocket expenses. For the period from December 1, 1995 (effective date of
transfer agency agreement) through October 31, 1996, the Fund paid the
Transfer Agent $162,358. Mellon Bank, N.A., (the "Custodian"), the Manager's
parent, One Mellon Bank Center, Pittsburgh, Pennsylvania 15258, acts as
custodian of the Fund's assets. Under a Custody Agreement with the Fund, the
Custodian holds the Fund's securities and keeps all necessary accounts and
records. For its custody services, the Custodian receives a monthly fee
based on the market value of the Fund's assets held in custody and receives
certain securities transaction charges. For the period from May 10, 1996
(effective date of Custody Agreement) through October 31, 1996, the Fund paid
the Custodian $9,117.
Stroock & Stroock & Lavan LLP, 180 Maiden Lane, New York, New York
10038-4982, as counsel for the Fund, has rendered its opinion as to certain
legal matters regarding the due authorization and valid issuance of the
shares being sold pursuant to the Fund's Prospectus.
Ernst & Young LLP, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as auditors of the Fund.
APPENDIX
Descriptions of Standard & Poor's Ratings Group ("S&P") and Moody's
Investors Service, Inc. ("Moody's") ratings.
S&P
Bond Ratings
AAA
Bonds rated AAA have the highest rating assigned by S&P. Capacity to
pay interest and repay principal is extremely strong.
AA
Bonds rated AA have a very strong capacity to pay interest and repay
principal and differ from the highest rated issues only in a small degree.
A
Bonds rated A have a strong capacity to pay interest and repay principal
although they are somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions than obligations in higher rated
categories.
BBB
Bonds rated BBB are regarded as having an adequate capacity to pay
interest and repay principal. Whereas they normally exhibit adequate
protection parameters, adverse economic conditions or changing circumstances
are more likely to lead to a weakened capacity to pay interest and repay
principal for bonds in this category than for bonds in higher rated
categories.
BB, B, CCC, CC, C
Bonds rated BB, B, CCC, CC and C are regarded as having predominantly
speculative characteristics with respect to capacity to pay interest and
repay principal in accordance with the terms of the obligation. BB indicates
the lowest degree of speculation and CC the highest degree of speculation.
While such bonds will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions.
BB
Bonds rated BB have less near-term vulnerability to default than other
speculative grade debt. However, they face major ongoing uncertainties or
exposure to adverse business, financial or economic conditions which could
lead to inadequate capacity to meet timely interest and principal payments.
B
Bonds rated B have a greater vulnerability to default but presently have
the capacity to meet interest payments and principal repayments. Adverse
business, financial or economic conditions would likely impair capacity or
willingness to pay interest and repay principal.
CCC
Bonds rated CCC have a current identifiable vulnerability to default,
and are dependent upon favorable business, financial and economic conditions
to meet timely payments of interest and repayment of principal. In the event
of adverse business, financial or economic conditions, they are not likely to
have the capacity to pay interest and repay principal.
CC
The rating CC is typically applied to debt subordinated to senior debt
which is assigned an actual or implied CCC- rating.
C
The rating C is typically applied to income bonds on which no interest
is being paid.
Plus (+) or minus (-): The ratings from AA to CCC may be modified by
the addition of a plus or minus sign to show relative standing within the
major ratings categories.
Commercial Paper Ratings
An S&P commercial paper rating is a current assessment of the likelihood
of timely payment of debt having an original maturity of no more than 365
days. Issues assigned an A rating are regarded as having the greatest
capacity for timely payment. Issues in this category are delineated with the
numbers 1, 2 and 3 to indicate the relative degree of safety.
A-1
This designation indicates the degree of safety regarding timely payment
is either overwhelming or very strong. Those issues determined to possess
overwhelming safety characteristics are denoted with a plus sign (+)
designation.
A-2
Capacity for timely payment on issues with this designation is strong.
However, the relative degree of safety is not as high as for issues
designated "A-l."
A-3
Issues carrying this designation have a satisfactory capacity for timely
payment. They are, however, somewhat more vulnerable to the adverse effects
of changes in circumstances than obligations carrying the higher
designations.
Moody's
Bond Ratings
Aaa
Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized
are most unlikely to impair the fundamentally strong position of such issues.
Aa
Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what generally are
known as high-grade bonds. They are rated lower than the best bonds because
margins of protection may not be as large in Aaa securities or fluctuation of
protective elements may be of greater amplitude or there may be other
elements present which make the long-term risks appear somewhat larger than
in Aaa securities.
A
Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper medium-grade obligations. Factors giving
security to principal and interest are considered adequate, but elements may
be present which suggest a susceptibility to impairment sometime in the
future.
Baa
Bonds which are rated Baa are considered as medium-grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest
payments and principal security may appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics as
well.
Ba
Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well assured. Often the protection of
interest and principal payments may be very moderate, and therefore not well
safeguarded during both good and bad times over the future. Uncertainty of
position characterizes bonds in this class.
B
Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance
of other terms of the contract over any long period of time may be small.
Caa
Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal
or interest.
Ca
Bonds which are rated Ca present obligations which are speculative in a
high degree. Such issues are often in default or have other marked
shortcomings.
Moody's applies the numerical modifiers 1, 2 and 3 to show relative
standing within the major rating categories, except in the Aaa category and
in the categories below B. The modifier 1 indicates a ranking for the
security in the higher end of a rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates a ranking in the lower end of
a rating category.
Commercial Paper Ratings
The rating Prime-1 (P-1) is the highest commercial paper rating assigned
by Moody's. Issuers of P-1 paper must have a superior capacity for repayment
of short-term promissory obligations, and ordinarily will be evidenced by
leading market positions in well established industries, high rates of return
on funds employed, conservative capitalization structures with moderate
reliance on debt and ample asset protection, broad margins in earnings
coverage of fixed financial charges and high internal cash generation, and
well established access to a range of financial markets and assured sources
of alternate liquidity.
Issuers (or related supporting institutions) rated Prime-2 (P-2) have a
strong capacity for repayment of short-term promissory obligations. This
ordinarily will be evidenced by many of the characteristics cited above but
to a lesser degree. Earnings trends and coverage ratios, while sound, will
be more subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.
Issuers (or related supporting institutions) rated Prime-3 (P-3) have an
acceptable capacity for repayment of short-term promissory obligations. The
effect of industry characteristics and market composition may be more
pronounced. Variability in earnings and profitability may result in changes
in the level of debt protection measurements and the requirements for
relatively high financial leverage. Adequate alternate liquidity is
maintained.
<TABLE>
<CAPTION>
PREMIER VALUE FUND
(FORMERLY PREMIER STRATEGIC INVESTING)-SEE NOTE 1
STATEMENT OF INVESTMENTS OCTOBER 31, 1996
Common Stocks-94.7% Shares Value
______ _______
<S> <C> <C>
Consumer Durables-2.1% Newell................ 185,000 $ 5,249,375
______
Consumer Non-durables-9.8% First Brands...... 230,000 6,526,250
Kimberly-Clark......................... 74,100 6,909,825
Philip Morris Cos...................... 60,000 5,557,500
Warnaco Group, Cl. A................... 225,000 5,596,875
______
24,590,450
______
Consumer Services-1.9%...... La Quinta Inns 244,000 4,880,000
______
Electronic Technology-15.5% Cabletron Systems 85,000 (a) 5,301,875
Intel....................................... 66,500 7,306,688
International Business Machines........ 40,000 5,160,000
McDonnell Douglas...................... 94,000 5,123,000
Micron Technology...................... 160,000 4,060,000
Perkin-Elmer........................... 115,000 6,166,875
United Technologies.................... 46,000 5,922,500
______
39,040,938
______
Energy Minerals-9.0% Amerada Hess............ 105,000 5,814,375
Phillips Petroleum..................... 135,000 5,535,000
Tosco....................................... 105,000 5,893,125
Unocal...................................... 145,000 5,310,625
______
22,553,125
______
Finance-5.9% Fleet Financial Group........... 61,000 (a) 3,042,375
PMI Group.............................. 110,000 6,283,750
Signet Banking......................... 190,000 5,486,250
______
14,812,375
______
Health Services-4.5% Allegiance.............. 295,000 (a) 5,531,250
Columbia/HCA Healthcare................ 157,500 5,630,625
______
11,161,875
______
Health Technology-7.7% Baxter International 125,000 5,203,125
Bristol-Myers Squibb................... 65,000 6,873,750
DePuy...................................... 151,000 (a) 2,642,500
Sandoz AG.............................. 4,075 4,693,397
______
19,412,772
______
Industrial Services-2.3% Cooper Cameron...... 90,000 (a) 5,748,750
______
Non-Energy Minerals-1.7% Cemex, S.A. de C.V., Cl. B 1,182,000 4,306,281
______
Process Industries-9.0% Hoechst AG........... 150,000 5,627,470
National Service Industries............ 74,000 2,553,000
Tenneco................................ 95,000 4,702,500
Westinghouse Electric.................. 300,000 5,137,500
Witco....................................... 150,000 4,650,000
______
22,670,470
______
PREMIER VALUE FUND
(FORMERLY PREMIER STRATEGIC INVESTING)-SEE NOTE 1
STATEMENT OF INVESTMENTS (CONTINUED) OCTOBER 31, 1996
Common Stocks (continued) Shares Value
_______ ______
Producer Manufacturing-12.9% General Signal 240,000 $ 9,780,000
Masco....................................... 175,000 5,490,625
Olin........................................ 130,000 5,525,000
Raychem................................ 85,000 6,640,625
Xerox....................................... 107,000 4,962,125
______
32,398,375
______
Retail Trade-1.8% Pier 1 Imports............. 330,000 4,620,000
______
Technology Services-1.4% Ingram Micro, Cl. A 78,500 (a) 1,413,000
Toolex-Alpha N.V....................... 219,900 (a) 2,061,563
______
3,474,563
______
Transportation-1.0% Yellow................... 190,000 (a) 2,481,875
______
Utilities-8.2% Entergy....................... 190,000 5,320,000
GTE......................................... 120,000 5,055,000
Hong Kong Telecom, A.D.R............... 300,000 5,287,500
Tenaga Nasional Berhad................. 1,270,000 5,076,984
______
20,739,484
______
TOTAL COMMON STOCKS
(cost $227,795,007).................. $238,140,708
=======
Principal
Convertible Notes-2.1% Amount
______
INAMED, 11%, 3/31/1999
(cost $5,250,000).................... $ 5,250,000 (b) $ 5,250,000
=======
Short-Term Investments-5.1%
U.S. Treasury Bill;......... 5.36%, 1/16/1997
(cost $12,912,362)................... $..13,049,000 $ 12,911,203
=======
TOTAL INVESTMENTS (cost $245,957,369)....................................... 101.9% $256,301,911
=== =======
LIABILITIES, LESS CASH AND RECEIVABLES...................................... (1.9%) $ (4,752,231)
=== =======
NET ASSETS.................................................................. 100.0% $251,549,680
=== =======
Notes to Statement of Investments:
(a) Non-income producing.
(b) Security restricted as to public resale. Investment in restricted
security with an aggregate value of $5,250,000, represents approximately
2.1% of net assets;
</TABLE>
<TABLE>
<CAPTION>
Acquisition Purchase Percentage of
Security Date Price Net Assets Valuation*
------------ --------- ------- --------- --------
<S> <C> <C> <C> <C>
INAMED 11%, 3/31/1999.................... 1/23/96 $100.00 2.1% Cost
*The valuation of this security has been determined in good faith under
the direction of the Board of Trustees.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
PREMIER VALUE FUND
(FORMERLY PREMIER STRATEGIC INVESTING)-SEE NOTE 1
STATEMENT OF ASSETS AND LIABILITIES OCTOBER 31, 1996
Cost Value
_______ _______
<S> <C> <C> <C> <C>
ASSETS: Investments in securities-See Statement of Investments $245,957,369 $256,301,911
Receivable for investment securities sold.. 9,346,222
Receivable for shares of Beneficial Interest subscribed 181
Dividends and interest receivable.......... 236,614
Prepaid expenses........................... 32,282
______
265,917,210
______
LIABILITIES: Due to The Dreyfus Corporation and affiliates 188,109
Due to Distributor......................... 82,744
Cash overdraft due to Custodian............ 496,449
Payable for investment securities purchased 13,379,964
Payable for shares of Beneficial Interest redeemed 127,355
Accrued expenses........................... 92,909
______
14,367,530
______
NET ASSETS.................................................................. $251,549,680
=======
REPRESENTED BY: Paid-in capital............................ $201,310,561
Accumulated undistributed investment income-net431,484
Accumulated net realized gain (loss) on investments 39,463,334
Accumulated net unrealized appreciation (depreciation)
on investments and foreign currency transactions 10,344,301
______
NET ASSETS.................................................................. $251,549,680
=======
NET ASSET VALUE PER SHARE
_______________
Class A Class B Class C Class R
______ _______ ______ ______
Net Assets................................. $207,387,715 $ 44,152,227 $ 6,059 $ 3,679
Shares Outstanding......................... 9,251,244 2,013,839 276.69 164.13
NET ASSET VALUE PER SHARE.................. $22.42 $21.92 $21.90 $22.42
==== ==== ==== ====
SEE NOTES TO FINANCIAL STATEMENTS.
PREMIER VALUE FUND
(FORMERLY PREMIER STRATEGIC INVESTING)-SEE NOTE 1
STATEMENT OF OPERATIONS YEAR ENDED OCTOBER 31, 1996
INVESTMENT INCOME
INCOME: Cash dividends (net of $24,046 foreign taxes withheld
at source)............................. $ 4,516,218
Interest................................... 1,026,660
______
Total Income......................... $ 5,542,878
EXPENSES: Management fee-Note 3(a)................... $ 1,948,566
Shareholder servicing costs-Note 3(c)...... 943,422
Distribution fees-Note 3(b)................ 340,657
Professional fees.......................... 59,183
Trustees' fees and expenses-Note 3(d)...... 43,571
Registration fees.......................... 39,561
Custodian fees-Note 3(c)................... 37,526
Dividends on securities sold short......... 6,000
Prospectus and shareholders' reports....... 2,155
Miscellaneous.............................. 7,209
______
Total Expenses....................... 3,427,850
______
INVESTMENT INCOME-NET....................................................... 2,115,028
______
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS-Note 4:
Net realized gain (loss) on investments and foreign
currency transactions:
Long transactions.................... $40,298,134
Short sale transactions.............. (2,913,991)
Net realized gain on financial futures..... 431,295
Net realized gain on forward currency exchange contracts 282,584
______
Net Realized Gain.................... 38,098,022
Net unrealized appreciation on investments, securities sold
short and foreign currency transactions [including
($46,475) net unrealized (depreciation)
on financial futures] (1,714,535)
______
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS...................... 36,383,487
______
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $38,498,515
=======
SEE NOTES TO FINANCIAL STATEMENTS.
PREMIER VALUE FUND
(FORMERLY PREMIER STRATEGIC INVESTING)-SEE NOTE 1
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
October 31, 1996 October 31, 1995
________ ________
OPERATIONS:
Investment income-net.................................................... $ 2,115,028$ 3,590,330
Net realized gain (loss) on investments.................................. 38,098,022 24,133,447
Net unrealized appreciation (depreciation) on investments................ (1,714,535) 1,574,520
______ ______
Net Increase (Decrease) in Net Assets Resulting from Operations...... 38,498,515 29,298,297
______ ______
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net:
Class A shares......................................................... (2,945,686) (595,707)
Class B shares......................................................... (305,675) (52,362)
Class C shares......................................................... (13) --
Class R shares......................................................... (17) --
Net realized gain on investments:
Class A shares......................................................... (19,971,560) (6,469,383)
Class B shares......................................................... (4,213,094) (1,137,286)
Class C shares......................................................... (98) --
Class R shares......................................................... (97) --
______ ______
Total Dividends...................................................... (27,436,240) (8,254,738)
______ ______
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares......................................................... 38,025,441 21,994,003
Class B shares......................................................... 2,898,434 7,596,999
Class C shares......................................................... 86,841 1,000
Class R shares......................................................... 2,568 1,000
Dividends reinvested:
Class A shares......................................................... 21,775,972 6,576,053
Class B shares......................................................... 4,346,451 1,152,348
Class C shares......................................................... 112 _-
Class R shares......................................................... 114 _-
Cost of shares redeemed:
Class A shares......................................................... (70,390,630) (76,782,353)
Class B shares......................................................... (9,328,259) (8,700,597)
Class C shares......................................................... (82,714) --
Class R shares......................................................... -- --
______ ______
Increase (Decrease) in Net Assets from Beneficial Interest Transactions (12,665,670) (48,161,547)
______ ______
Total Increase (Decrease) in Net Assets............................ (1,603,395) (27,117,988)
NET ASSETS:
Beginning of Period...................................................... 253,153,075 280,271,063
______ ______
End of Period............................................................ $251,549,680 $253,153,075
======= =======
UNDISTRIBUTED INVESTMENT INCOME-NET........................................ $ 431,484 $ 1,567,646
______ ______
SEE NOTES TO FINANCIAL STATEMENTS.
PREMIER VALUE FUND
(FORMERLY PREMIER STRATEGIC INVESTING)-SEE NOTE 1
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Shares
___________________________________
Year Ended Year Ended
October 31, 1996 October 31, 1995
______ ______
CAPITAL SHARE TRANSACTIONS:
Class A
____
Shares sold............................................................ 1,745,408 1,104,032
Shares issued for dividends reinvested................................. 1,060,690 357,006
Shares redeemed........................................................ (3,224,068) (3,862,550)
______ ______
Net Increase (Decrease) in Shares Outstanding (417,970) (2,401,512)
======= =======
Class B
____
Shares sold............................................................ 134,633 375,923
Shares issued for dividends reinvested................................. 214,958 63,385
Shares redeemed........................................................ (431,380) (431,198)
______ ______
Net Increase (Decrease) in Shares Outstanding (81,789) 8,110
======= =======
Class C*
____
Shares sold............................................................ 4,041 47
Shares issued for dividends reinvested................................. 6 --
Shares redeemed........................................................ (3,817) --
______ ______
Net Increase (Decrease) in Shares Outstanding 230 47
======= =======
Class R*
____
Shares sold............................................................ 112 46
Shares issued for dividends reinvested................................. 6 --
______ ______
Net Increase (Decrease) in Shares Outstanding 118 46
======= =======
*From September 1, 1995 (commencement of initial offering) to October 31,
1995.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
PREMIER VALUE FUND
(FORMERLY PREMIER STRATEGIC INVESTING)-SEE NOTE 1
FINANCIAL HIGHLIGHTS
Reference is made to pages 4, 5 and 6 of the Fund's
Prospectus dated March 3, 1996.
SEE NOTES TO FINANCIAL STATEMENTS.
PREMIER VALUE FUND
(FORMERLY PREMIER STRATEGIC INVESTING)-SEE NOTE 1
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
Premier Value Fund (the "Fund") is registered under the Investment
Company Act of 1940 ("Act") as a non-diversified open-end management
investment company. The Fund's investment objective is capital growth. The
Dreyfus Corporation ("Manager") serves as the Fund's investment adviser. The
Manager is a direct subsidiary of Mellon Bank, N.A. ("Mellon").
Premier Mutual Fund Services, Inc. (the "Distributor") acts as the
distributor of the Fund's shares. The Fund is authorized to issue an
unlimited number of $.001 par value shares in the following classes of
shares: Class A, Class B, Class C and Class R. Class A shares are subject to
a sales charge imposed at the time of purchase, Class B shares are subject to
a contingent deferred sales charge imposed at the time of redemption on
redemptions made within six years of purchase, Class C shares are subject to
a contingent deferred sales charge imposed at the time of redemption on
redemptions made within one year of purchase and Class R shares are sold at
net asset value per share only to institutional investors. Other differences
between the four Classes include the services offered to and the expenses
borne by each Class and certain voting rights.
Effective August 12, 1996, the Fund changed its name from "Premier
Strategic Investing" to "Premier Value Fund".
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management
estimates and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities (including options and
financial futures) are valued at the last sales price on the securities
exchange on which such securities are primarily traded or at the last sales
price on the national securities market. Securities not listed on an exchange
or the national securities market, or securities for which there were no
transactions, are valued at the average of the most recent bid and asked
prices, except for open short positions, where the asked price is used for
valuation purposes. Bid price is used when no asked price is available.
Securities for which there are no such valuations are valued at fair value as
determined in good faith under the direction of the Board of Trustees.
Investments denominated in foreign currencies are translated to U.S. dollars
at the prevailing rates of exchange. Forward currency exchange contracts are
valued at the forward rate.
(b) Foreign currency transactions: The Fund does not isolate that portion
of the results of operations resulting from changes in foreign exchange rates
on investments from the fluctuations arising from changes in market prices of
securities held. Such fluctuations are included with the net realized and
unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, sales of foreign currencies, currency
gains or losses realized on securities transactions, the difference between
the amounts of dividends, interest and foreign withholding taxes recorded on
the Fund's books, and the U.S. dollar equivalent of the amounts actually
received or paid. Net unrealized foreign exchange gains and losses arise from
changes in the value of assets and liabilities other than investments in
securities, resulting from changes in exchange rates. Such gains and losses
are included with net realized and unrealized gain or loss on investments.
(c) Securities transactions and investment income: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Dividend
income is recognized on the ex-dividend date and interest income, including,
where applicable, amortization of discount on investments, is recognized on
the accrual basis.
(d) Dividends to shareholders: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net and dividends from net realized
capital gain are normally declared and paid annually, but the Fund may make
PREMIER VALUE FUND
(FORMERLY PREMIER STRATEGIC INVESTING)-SEE NOTE 1
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code. To the extent that net realized
capital gain can be offset by capital loss carryovers, if any, it is the
policy of the Fund not to distribute such gain.
(e) Federal income taxes: It is the policy of the Fund to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with the applicable
provisions of the Internal Revenue Code, and to make distributions of taxable
income sufficient to relieve it from substantially all Federal income and
excise taxes.
NOTE 2-BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed funds in a $100 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes, including the financing of redemptions. Interest is charged to the
Fund at rates which are related to the Federal Funds rate in effect at the
time of borrowings. For the period ended October 31, 1996, the Fund did not
borrow under the line of credit.
NOTE 3-MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(a) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee is computed at the annual rate of .75 of 1% of the value
of the Fund's average daily net assets and is payable monthly. The Agreement
provides that if in any full fiscal year the aggregate expenses of the Fund,
exclusive of taxes, brokerage, interest on borrowings (which, in the view of
Stroock & Stroock & Lavan, counsel to the Fund, also contemplates dividends
on securities sold short) and extraordinary expenses, exceed the expense
limitation of any state having jurisdiction over the Fund, the Fund may
deduct from payments to be made to the Manager, or the Manager will bear the
amount of such excess to the extent required by state law. The most stringent
state expense limitation applicable to the Fund presently requires
reimbursement of expenses in any full fiscal year that such expenses
(excluding distribution expenses and certain expenses as described above)
exceed 21\2% of the first $30 million, 2% of the next $70 million and 11\2%
of the excess over $100 million of the value of the Fund's average net assets
in accordance with California "blue sky" regulations. There was no expense
reimbursement for the period ended October 31, 1996.
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager,
retained $79,525 during the period ended October 31, 1996 from commissions
earned on sales of the Fund's shares.
(b) Under the Distribution Plan (the "Plan") adopted pursuant to Rule
12b-1 under the Act, the Fund pays the Distributor for distributing the
Fund's Class B and Class C shares at an annual rate of .75 of 1% of the value
of the average daily net assets of Class B and Class C shares, respectively.
During the period ended October 31, 1996, $340,572 and $85 were charged to
the Class B and Class C shares, respectively, by the Distributor pursuant to
the Plan.
(c) Under the Shareholder Services Plan, the Fund pays the Distributor at
an annual rate of .25 of 1% of the value of the average daily net assets of
Class A, Class B and Class C shares for the provision of certain services.
The services provided may include personal services relating to shareholder
accounts, such as answering shareholder inquiries regarding the Fund and
providing reports and other information, and services related to the
maintenance of shareholder accounts. The Distributor may make payments to
Service Agents (a securities dealer, financial institution or other industry
professional) in respect of these services. The Distributor determines the
amounts to be paid to Service Agents. During the period ended October 31,
1996, $535,964, $113,524 and $28 were charged to the Class A, Class B and
Class C shares, respectively, by the Distributor pursuant to the Shareholder
Services Plan.
PREMIER VALUE FUND
(FORMERLY PREMIER STRATEGIC INVESTING)-SEE NOTE 1
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Effective December 1, 1995, the Fund compensates Dreyfus Transfer, Inc., a
wholly-owned subsidiary of the Manager, under a
transfer agency agreement for providing personnel and facilities to perform
transfer agency services for the Fund. Such compensation amounted to $162,358
during the period ended October 31, 1996.
Effective May 10, 1996, the Fund entered into a custody agreement with
Mellon to provide custodial services for the Fund. During the period ended
October 31, 1996, $9,117 was paid to Mellon pursuant to the custody
agreement.
(d) Each trustee who is not an "affiliated person" as defined in the Act,
receives from the Fund an annual fee of $2,500 and an attendance fee of $500
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
NOTE 4-SECURITIES TRANSACTIONS:
(a) The following summarizes the aggregate amount of purchases and sales
of investment securities and securities sold short, excluding short-term
securities, financial futures and forward currency exchange contracts during
the period ended October 31, 1996:
Purchases Sales
________ ________
Long transactions................... $367,424,218 $391,080,820
Short sale transactions............. 15,925,657 9,754,723
________ ________
Total............................. $383,349,875 $400,835,543
======== ========
The Fund is engaged in short-selling which obligates the Fund to replace
the security borrowed by purchasing the security at
current market value. The Fund would incur a loss if the price of the
security increases between the date of the short sale and the date on which
the Fund replaces the borrowed security. The Fund would realize a gain if the
price of the security declines between those dates. Until the Fund replaces
the borrowed security, the Fund will maintain daily, a segregated account
with a broker and custodian, of cash and/or U.S. Government securities
sufficient to cover its short position. At October 31, 1996, there were no
securities sold short outstanding.
The Fund enters into forward currency exchange contracts in order to
hedge its exposure to changes in foreign currency exchange rates on its
foreign portfolio holdings. When executing forward currency exchange
contracts, the Fund is obligated to buy or sell a foreign currency at a
specified rate on a certain date in the future. With respect to sales of
forward currency exchange contracts, the Fund would incur a loss if the value
of the contract increases between the date the forward contract is opened and
the date the forward contract is closed. The Fund realizes a gain if the
value of the contract decreases between those dates. With respect to
purchases of forward currency exchange contracts, the Fund would incur a loss
if the value of the contract decreases between the date the forward contract
is opened and the date the forward contract is closed. The Fund realizes a
gain if the value of the contract increases between those dates. The Fund is
also exposed to credit risk associated with counterparty nonperformance on
these forward currency exchange contracts which is typically limited to the
unrealized gains on such contracts that are recognized in the Statement of
Assets and Liabilities. At October 31, 1996, there were no forward currency
exchange contracts outstanding.
The Fund may invest in financial futures contracts in order to gain
exposure to or protect against changes in the market. The Fund is exposed to
market risk as a result of changes in the value of the underlying financial
instruments. Investments in financial futures require the Fund to "mark to
market" on a daily basis, which reflects the change in the market value of
the contract at the close of each day's trading. Accordingly, variation
margin payments are received or made to reflect daily unrealized gains or
losses. When the contracts are closed, the Fund recognizes a realized gain or
PREMIER VALUE FUND
(FORMERLY PREMIER STRATEGIC INVESTING)-SEE NOTE 1
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
loss. These investments require initial margin deposits with a custodian,
which consist of cash or cash equivalents, up to approximately 10% of the
contract amount. The amount of these deposits is determined by the exchange
or Board of Trade on which the contract is traded and is subject to change.
At October 31, 1996, there were no financial futures contracts outstanding.
(b) At October 31, 1996, accumulated net unrealized appreciation on
investments was $10,344,542, consisting of $19,001,565 gross unrealized
appreciation and $8,657,023 gross unrealized depreciation.
At October 31, 1996, the cost of investments for Federal income tax
purposes was substantially the same as the cost for financial reporting
purposes (see the Statement of Investments).
PREMIER VALUE FUND
(FORMERLY PREMIER STRATEGIC INVESTING)-SEE NOTE 1
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF TRUSTEES
PREMIER VALUE FUND
We have audited the accompanying statement of assets and liabilities of
Premier Value Fund, including the statement of investments, as of October 31,
1996, and the related statement of operations for the year then ended, the
statement of changes in net assets for each of the two years in the period
then ended, and financial highlights for each of the years indicated therein.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included verification by
examination of securities held by the custodian as of October 31, 1996 and
confirmation of securities not held by the custodian by correspondence with
others. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Premier Value Fund, at October 31, 1996, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each
of the indicated years, in conformity with generally accepted accounting
principles.
[Ernst and Young LLP signature logo]
New York, New York
December 9, 1996
DREYFUS PREMIER VALUE FUND
PART C. OTHER INFORMATION
_________________________
Item 24 Financial Statements and Exhibits. - List
_______ _________________________________________
(a) Financial Statements:
Included in Part A of the Registration Statement:
Condensed Financial Information - (a) for (i) the period from
October 1, 1986 (commencement of operations) to October 31,
1986 and (ii) each of the ten years in the period ended
October 31, 1996 for Class A shares; and (b) for (i)the period
from January 15, 1993 to October 31, 1993 and (ii) each of the
three years ended October 31, 1996 for Class B shares; and (c)
for the period September 1, 1995 (commencement of initial
offering) through October 31, 1995 and for the fiscal year
ended October 31, 1996 for Class C and Class R shares,
respectively.
Included in Part B of the Registration Statement:
Statement of Investments--October 31, 1996.
Statement of Assets and Liabilities--October 31, 1996.
Statement of Operations--for the year ended October 31,
1996.
Statement of Changes in Net Assets--for the two years
ended October 31, 1995 and 1996.
Notes to Financial Statements.
Report of Ernst & Young LLP, Independent Auditors, dated
December 9, 1996.
Schedule Nos. I through VII and other Financial Statement information, for
which provision is made in the applicable accounting regulations of the
Securities and Exchange Commission, are either omitted because they are not
required under the related instructions, they are inapplicable, or the
required information is presented in the financial statements or notes
thereto which are included in Part B of the Registration Statement.
Item 24. Financial Statements and Exhibits. - List (continued)
_______ _____________________________________________________
(b) Exhibits:
(1)(a) Registrant's Restated and Amended Agreement and Declaration of
Trust, as amended is incorporated by reference to Exhibit (1)(a)
of Post-Effective Amendment No. 16 to the Registration Statement
on Form N-1A, filed on February 29, 1996.
(b) Registrant's Articles of Amendment are incorporated by reference to
Exhibit (1)(b) of Post-Effective Amendment No. 16 to the
Registration Statement on Form N-1A, filed on February 29, 1996.
(2) Registrant's By-Laws are incorporated by reference to Exhibit (2)
of Post-Effective Amendment No. 16 to the Registration Statement on
Form N-1A, filed on February 29, 1996.
(5) Management Agreement is incorporated by reference to Exhibit (5) of
Post-Effective Amendment No. 14 to the Registration Statement on
Form N-1A, filed on December 30, 1994.
(6) Distribution Agreement is incorporated by reference to Exhibit (6)
of Post-Effective Amendment No. 14 to the Registration Statement on
Form N-1A, filed on December 30, 1994.
(8) Custody Agreement between the Fund and The Bank of New York is
incorporated by reference to Exhibit (8) of Post-Effective
Amendment No. 16 to the Registration Statement on Form N-1A, filed
on February 29, 1996.
(9) The Revised Shareholder Services Plan is incorporated by reference
to Post-Effective Amendment No. 15 to the Registration Statement on
Form N-1A, filed on August 31, 1995.
(10) Opinion and consent of Registrant's counsel is incorporated by
reference to Post-Effective Amendment No. 16 to the Registration
Statement on Form N-1A, filed on February 29, 1996.
(11) Consent of Independent Auditors.
(14) Model Retirement Plan is incorporated by reference to Exhibit 14 of
Post-Effective Amendment No. 16 to the Registration Statement on
Form N-1A, filed on February 29, 1996.
(15) The Revised Distribution Plan is incorporated by reference to Post-
Effective Amendment No. 15 to the Registration Statement on Form N-
1A, filed on August 31, 1995.
Item 24. Financial Statements and Exhibits. - List (continued)
_______ _____________________________________________________
(16) Schedules of Computation of Performance Data are incorporated by
reference to Exhibit (16) of Post-Effective Amendment No. 13 to the
Registration Statement on Form N-1A, filed on January 20, 1994.
(17) Financial Data Schedule.
(18) The Revised Rule 18f-3 Plan.
Other Exhibits
(a) Powers of Attorney are incorporated by reference to
"Other Exhibits (a)" of Post-Effective Amendments Nos.
4, 8, 11, 13, 14 and 15.
(b) Certificate of Secretary is incorporated by reference to
"Other Exhibits (b)" of Post-Effective Amendment Nos. 4,
13 and 14.
Item 25. Persons Controlled by or under Common Control with Registrant.
Not Applicable
Item 26. Number of Holders of Securities.
(1) (2)
Number of Record
Title of Class Holders as of February 18, 1997
Shares of Beneficial Interest
Par value $.001 Class A = 10,699
Class B = 2,070
Class C = 13
Class R = 3
Item 27. Indemnification
Reference is made to Article VIII of the Registrant's Amended and
Restated Agreement and Declaration of Trust, dated July 24, 1985,
as amended and restated on July 24, 1992, filed as Exhibit 1 hereto
and the laws of The Commonwealth of Massachusetts. The application
of these provisions is limited by Article 10 of the Registrant's
By-Laws filed as Exhibit 2 hereto and by the following undertaking
set forth in the rules promulgated by the Securities and Exchange
Commission:
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted Board members, officers and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in
the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in such Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful defense
of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in
such Act and will be governed by the final adjudication of such
issue.
Reference is also made to the Distribution Agreement incorporated
by reference to Exhibit 24(b)(6) of Post-Effective Amendment No. 14
to the Registration Statement on Form N-1A, filed on December 30,
1994.
Item 28. Business and Other Connections of Investment Adviser.
The Dreyfus Corporation ("Dreyfus") and subsidiary
companies comprise a financial service organization whose
business consists primarily of providing investment management
services as the investment adviser, manager and distributor for
sponsored investment companies registered under the Investment
Company Act of 1940 and as an investment adviser to
institutional and individual accounts. Dreyfus also serves as
sub-investment adviser to and/or administrator of other
investment companies. Dreyfus Service Corporation, a wholly-
owned subsidiary of Dreyfus, is a registered broker-dealer.
Dreyfus Management, Inc., another wholly-owned subsidiary,
provides investment management services to various pension
plans, institutions and individuals.
Item 28. Business and Other Connections of Investment Adviser (continued)
________ ________________________________________________________________
Officers and Directors of Investment Adviser
____________________________________________
Name and Position
with Dreyfus Other Businesses
_________________ ________________
MANDELL L. BERMAN Real estate consultant and private investor
Director 29100 Northwestern Highway, Suite 370
Southfield, Michigan 48034;
Past Chairman of the Board of Trustees:
Skillman Foundation;
Member of The Board of Vintners Intl.
BURTON C. BORGELT Chairman Emeritus of the Board and
Director Past Chairman, Chief Executive Officer and
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405
Director:
DeVlieg-Bullard, Inc.
1 Gorham Island
Westport, Connecticut 06880
Mellon Bank Corporation***;
Mellon Bank, N.A.***
FRANK V. CAHOUET Chairman of the Board, President and
Director Chief Executive Officer:
Mellon Bank Corporation***;
Mellon Bank, N.A.***
Director:
Avery Dennison Corporation
150 North Orange Grove Boulevard
Pasadena, California 91103;
Saint-Gobain Corporation
750 East Swedesford Road
Valley Forge, Pennsylvania 19482;
Teledyne, Inc.
1901 Avenue of the Stars
Los Angeles, California 90067
W. KEITH SMITH Chairman and Chief Executive Officer:
Chairman of the Board The Boston Company****;
Vice Chairman of the Board:
Mellon Bank Corporation***;
Mellon Bank, N.A.***;
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405
CHRISTOPHER M. CONDRON Vice Chairman:
President, Chief Mellon Bank Corporation***;
Executive Officer, The Boston Company****;
Chief Operating Deputy Director:
Officer and a Mellon Trust***;
Director Chief Executive Officer:
The Boston Company Asset Management,
Inc.****;
President:
Boston Safe Deposit and Trust Company****
STEPHEN E. CANTER Director:
Vice Chairman and The Dreyfus Trust Company++;
Chief Investment Officer, Formerly, Chairman and Chief Executive Officer:
and a Director Kleinwort Benson Investment Management
Americas Inc.*
LAWRENCE S. KASH Chairman, President and Chief
Vice Chairman-Distribution Executive Officer:
and a Director The Boston Company Advisors, Inc.
53 State Street
Exchange Place
Boston, Massachusetts 02109
Executive Vice President and Director:
Dreyfus Service Organization, Inc.**;
Director:
Dreyfus America Fund
The Dreyfus Consumer Credit Corporation*;
The Dreyfus Trust Company++;
Dreyfus Service Corporation*;
President:
The Boston Company****;
Laurel Capital Advisors***;
Boston Group Holdings, Inc.;
Executive Vice President:
Mellon Bank, N.A.***;
Boston Safe Deposit and Trust
Company****;
WILLIAM T. SANDALLS, JR. Director:
Senior Vice President and Dreyfus Partnership Management, Inc.*;
Chief Financial Officer Seven Six Seven Agency, Inc.*;
President and Director:
Lion Management, Inc.*;
Executive Vice President and Director:
Dreyfus Service Organization, Inc.*;
Vice President, Chief Financial Officer and
Director:
Dreyfus Acquisition Corporation*;
Dreyfus America Fund
Vice President and Director:
The Dreyfus Consumer Credit Corporation*;
The Truepenny Corporation*;
Treasurer, Financial Officer and Director:
The Dreyfus Trust Company++;
Treasurer and Director:
Dreyfus Management, Inc.*;
Dreyfus Personal Management, Inc.*;
Dreyfus Service Corporation*;
Major Trading Corporation*;
Formerly, President and Director:
Sandalls & Co., Inc.
WILLIAM F. GLAVIN, JR. Executive Vice President:
Vice President-Corporate Dreyfus Service Corporation*;
Development Senior Vice President:
The Boston Company Advisors, Inc.
53 State Street
Exchange Place
Boston, Massachusetts 02109
MARK N. JACOBS Vice President, Secretary and Director:
Vice President, Lion Management, Inc.*;
General Counsel Secretary:
and Secretary The Dreyfus Consumer Credit Corporation*;
Dreyfus Management, Inc.*;
Assistant Secretary:
Dreyfus Service Organization, Inc.**;
Major Trading Corporation*;
The Truepenny Corporation*
PATRICE M. KOZLOWSKI None
Vice President-
Corporate Communications
MARY BETH LEIBIG None
Vice President-
Human Resources
JEFFREY N. NACHMAN President and Director:
Vice President-Mutual Fund Dreyfus Transfer, Inc.
Accounting One American Express Plaza
Providence, Rhode Island 02903
ANDREW S. WASSER Vice President:
Vice President-Information Mellon Bank Corporation***
Services
ELVIRA OSLAPAS Assistant Secretary:
Assistant Secretary Dreyfus Service Corporation*;
Dreyfus Management, Inc.*;
Dreyfus Acquisition Corporation, Inc.*;
The Truepenny Corporation+
______________________________________
* The address of the business so indicated is 200 Park Avenue, New
York, New York 10166.
** The address of the business so indicated is 131 Second Street, Lewes,
Delaware 19958.
*** The address of the business so indicated is One Mellon Bank Center,
Pittsburgh, Pennsylvania 15258.
**** The address of the business so indicated is One Boston Place, Boston,
Massachusetts 02108.
+ The address of the business so indicated is Atrium Building, 80 Route
4 East, Paramus, New Jersey 07652.
++ The address of the business so indicated is 144 Glenn Curtiss
Boulevard, Uniondale, New York 11556-0144.
Item 29. Principal Underwriters
________ ______________________
(a) Other investment companies for which Registrant's principal
underwriter (exclusive distributor) acts as principal underwriter or
exclusive distributor:
1) Comstock Partners Funds, Inc.
2) Dreyfus A Bonds Plus, Inc.
3) Dreyfus Appreciation Fund, Inc.
4) Dreyfus Asset Allocation Fund, Inc.
5) Dreyfus Balanced Fund, Inc.
6) Dreyfus BASIC GNMA Fund
7) Dreyfus BASIC Money Market Fund, Inc.
8) Dreyfus BASIC Municipal Fund, Inc.
9) Dreyfus BASIC U.S. Government Money Market Fund
10) Dreyfus California Intermediate Municipal Bond Fund
11) Dreyfus California Tax Exempt Bond Fund, Inc.
12) Dreyfus California Tax Exempt Money Market Fund
13) Dreyfus Cash Management
14) Dreyfus Cash Management Plus, Inc.
15) Dreyfus Connecticut Intermediate Municipal Bond Fund
16) Dreyfus Connecticut Municipal Money Market Fund, Inc.
17) Dreyfus Florida Intermediate Municipal Bond Fund
18) Dreyfus Florida Municipal Money Market Fund
19) The Dreyfus Fund Incorporated
20) Dreyfus Global Bond Fund, Inc.
21) Dreyfus Global Growth Fund
22) Dreyfus GNMA Fund, Inc.
23) Dreyfus Government Cash Management
24) Dreyfus Growth and Income Fund, Inc.
25) Dreyfus Growth and Value Funds, Inc.
26) Dreyfus Growth Opportunity Fund, Inc.
27) Dreyfus Income Funds
28) Dreyfus Institutional Money Market Fund
29) Dreyfus Institutional Short Term Treasury Fund
30) Dreyfus Insured Municipal Bond Fund, Inc.
31) Dreyfus Intermediate Municipal Bond Fund, Inc.
32) Dreyfus International Funds, Inc.
33) Dreyfus Investment Grade Bond Funds, Inc.
34) The Dreyfus/Laurel Funds, Inc.
35) The Dreyfus/Laurel Funds Trust
36) The Dreyfus/Laurel Tax-Free Municipal Funds
37) Dreyfus LifeTime Portfolios, Inc.
38) Dreyfus Liquid Assets, Inc.
39) Dreyfus Massachusetts Intermediate Municipal Bond Fund
40) Dreyfus Massachusetts Municipal Money Market Fund
41) Dreyfus Massachusetts Tax Exempt Bond Fund
42) Dreyfus MidCap Index Fund
43) Dreyfus Money Market Instruments, Inc.
44) Dreyfus Municipal Bond Fund, Inc.
45) Dreyfus Municipal Cash Management Plus
46) Dreyfus Municipal Money Market Fund, Inc.
47) Dreyfus New Jersey Intermediate Municipal Bond Fund
48) Dreyfus New Jersey Municipal Bond Fund, Inc.
49) Dreyfus New Jersey Municipal Money Market Fund, Inc.
50) Dreyfus New Leaders Fund, Inc.
51) Dreyfus New York Insured Tax Exempt Bond Fund
52) Dreyfus New York Municipal Cash Management
53) Dreyfus New York Tax Exempt Bond Fund, Inc.
54) Dreyfus New York Tax Exempt Intermediate Bond Fund
55) Dreyfus New York Tax Exempt Money Market Fund
56) Dreyfus 100% U.S. Treasury Intermediate Term Fund
57) Dreyfus 100% U.S. Treasury Long Term Fund
58) Dreyfus 100% U.S. Treasury Money Market Fund
59) Dreyfus 100% U.S. Treasury Short Term Fund
60) Dreyfus Pennsylvania Intermediate Municipal Bond Fund
61) Dreyfus Pennsylvania Municipal Money Market Fund
62) Dreyfus S&P 500 Index Fund
63) Dreyfus Short-Intermediate Government Fund
64) Dreyfus Short-Intermediate Municipal Bond Fund
65) The Dreyfus Socially Responsible Growth Fund, Inc.
66) Dreyfus Stock Index Fund, Inc.
67) Dreyfus Tax Exempt Cash Management
68) The Dreyfus Third Century Fund, Inc.
69) Dreyfus Treasury Cash Management
70) Dreyfus Treasury Prime Cash Management
71) Dreyfus Variable Investment Fund
72) Dreyfus Worldwide Dollar Money Market Fund, Inc.
73) General California Municipal Bond Fund, Inc.
74) General California Municipal Money Market Fund
75) General Government Securities Money Market Fund, Inc.
76) General Money Market Fund, Inc.
77) General Municipal Bond Fund, Inc.
78) General Municipal Money Market Fund, Inc.
79) General New York Municipal Bond Fund, Inc.
80) General New York Municipal Money Market Fund
81) Premier Insured Municipal Bond Fund
82) Premier California Municipal Bond Fund
83) Premier Equity Funds, Inc.
84) Premier Global Investing, Inc.
85) Premier GNMA Fund
86) Premier Growth Fund, Inc.
87) Premier Municipal Bond Fund
88) Premier New York Municipal Bond Fund
89) Premier State Municipal Bond Fund
90) Premier Strategic Growth Fund
91) Premier Value Fund
(b)
Positions and
Name and principal Positions and offices with offices with
business address the Distributor Registrant
__________________ ___________________________ _____________
Marie E. Connolly+ Director, President, Chief President and
Executive Officer and Compliance Treasurer
Officer
Joseph F. Tower, III+ Senior Vice President, Treasurer Vice President
and Chief Financial Officer and Assistant
Treasurer
John E. Pelletier+ Senior Vice President, General Vice President
Counsel, Secretary and Clerk and Secretary
Roy M. Moura+ First Vice President None
Dale F. Lampe+ Vice President None
Mary A. Nelson+ Vice President Vice President
and Assistant
Treasurer
Paul Prescott+ Vice President None
Elizabeth A. Keeley++ Assistant Vice President Vice President
and Assistant
Secretary
Jean M. O'Leary+ Assistant Secretary and None
Assistant Clerk
John W. Gomez+ Director None
William J. Nutt+ Director None
Mark A. Karpe Vice President Vice President
and Assistant
Secretary
Douglas C. Conroy Supervisor of Treasury Services Vice President
and Assistant
Secretary
Michael S. Petrucelli Vice President Vice President
and Assistant
Treasurer
____________________________
+ Principal business address is 60 State Street, Boston, Massachusetts
02109.
++ Principal business address is 200 Park Avenue, New York, New York 10166.
Item 30. Location of Accounts and Records
________________________________
1. First Data Investor Services Group, Inc.,
a subsidiary of First Data Corporation
P.O. Box 9671
Providence, Rhode Island 02940-9671
2. The Bank of New York
90 Washington Street
New York, New York 10286
3. Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, Rhode Island 02940-9671
4. The Dreyfus Corporation
200 Park Avenue
New York, New York 10166
Item 31. Management Services
_______ ___________________
Not Applicable
Item 32. Undertakings
________ ____________
(1) To call a meeting of shareholders for the purpose of voting upon
the question of removal of a Board member or Board members when
requested in writing to do so by the holders of at least 10% of
the Registrant's outstanding shares and in connection with such
meeting to comply with the provisions of Section 16(c) of the
Investment Company Act of 1940 relating to shareholder
communications.
(2) To furnish each person to whom a prospectus is delivered with a
copy of the Fund's latest Annual Report to Shareholders, upon
request and without charge.
SIGNATURES
---------------
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Amendment to the Registration
Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has
duly caused this Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New York,
and State of New York on the 26th day of February, 1997.
DREYFUS PREMIER VALUE FUND
BY: /s/Marie E. Connolly*
____________________________
MARIE E. CONNOLLY, PRESIDENT
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below by the following
persons in the capacities and on the dates indicated.
Signatures Title Date
__________________________ _______________________________ _________
/s/Marie E. Connolly* President and Treasurer 02/26/97
______________________________ (Principal Executive Accounting
Marie E. Connolly and Financial Officer)
/s/David W. Burke* Board Member 02/26/97
______________________________
David W. Burke
/s/Joseph S. DiMartino* Board Member 02/26/97
______________________________
Joseph S. DiMartino
/s/Diane Dunst* Board Member 02/26/97
______________________________
Diane Dunst
/s/Rosalind Gersten Jacobs* Board Member 02/26/97
______________________________
Rosalind Gersten Jacobs
/s/Jay I. Meltzer* Board Member 02/26/97
______________________________
Jay I. Meltzer
/s/Daniel Rose* Board Member 02/26/97
______________________________
Daniel Rose
/s/Warren B. Rudman* Board Member 02/26/97
______________________________
Warren B. Rudman
/s/Sander Vanocur* Board Member 02/26/97
______________________________
Sander Vanocur
*BY: __________________________
Elizabeth Keeley,
Attorney-in-Fact
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the captions "Condensed
Financial Information" and "Transfer and Dividend Disbursing Agent,
Custodian, Counsel and Independent Auditors" and to the use of our report
dated December 9, 1996, in this Registration Statement (Form N-1A 33-6013)
of Dreyfus Premier Value Fund (formerly Premier Value Fund).
ERNST & YOUNG LLP
New York, New York
February 26, 1997
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THE DREYFUS FAMILY OF FUNDS
(Premier Family of Equity Funds)
Rule 18f-3 Plan
Rule 18f-3 under the Investment Company Act of 1940, as amended
(the "1940 Act"), requires that the Board of an investment company desiring to
offer multiple classes pursuant to said Rule adopt a plan setting forth the
separate arrang ement and expense allocation of each class, and any related
conversion features or exchange privileges.
The Board, including a majority of the non-interested Board
members, of each of the investment companies, or series thereof, listed on
Schedule A attached hereto (each, a "Fund") which desires to offer multiple
classes has determined that the following plan is in the best interests of each
class individually and each Fund as a whole:
1. Class Designation: Fund shares shall be divided into
Class A, Class B, Class C and Class R.
2. Differences in Services: The services offered to
shareholders of each Class shall be substantially the same, except that Right
of Accumulation, Letter of Intent and Reinvestment Privilege shall be available
only to holders of Class A shares.
3. Differences in Distribution Arrangements: Class A
shares shall be offered with a front-end sales charge, as such term is defined
in the Conduct Rules of the National Association of Securities Dealers, Inc.,
and a deferred sal es charge (a "CDSC"), as such term is defined in said Section
26(b), may be assessed on certain redemptions of Class A shares purchased
without an initial sales charge as part of an investment of $1 million or more.
The amount of the sales charge an d the amount of and provisions relating to the
CDSC pertaining to the Class A shares are set forth on Schedule B hereto.
Class B shares shall not be subject to a front-end sales charge,
but shall be subject to a CDSC and shall be charged an annual distribution fee
under a Distribution Plan adopted pursuant to Rule 12b-1 under the 1940 Act.
The amount o f and provisions relating to the CDSC, and the amount of the fees
under the Distribution Plan pertaining to the Class B shares, are set forth on
Schedule C hereto.
Class C shares shall not be subject to a front-end sales charge,
but shall be subject to a CDSC and shall be charged an annual distribution fee
under a Distribution Plan adopted pursuant to Rule 12b-1 under the 1940 Act.
The amount o f and provisions relating to the CDSC, and the amount of the fees
under the Distribution Plan pertaining to the Class C shares, are set forth on
Schedule D hereto.
Class R shares shall be offered at net asset value only to
institutional investors acting for themselves or in a fiduciary, advisory,
agency, custodial or similar capacity for qualified or non-qualified employee
benefit plans, includi ng pension, profit-sharing, SEP-IRAs and other deferred
compensation plans, whether established by corporations, partnerships, non-
profit entities or state and local governments, but not including IRAs or IRA
"Rollover Accounts."
Class A, Class B and Class C shares shall be subject to an
annual service fee at the rate of .25% of the value of the average daily net
assets of such Class pursuant to a Shareholder Services Plan.
4. Expense Allocation. The following expenses shall be
allocated, to the extent practicable, on a Class-by-Class basis: (a) fees under
the Distribution Plan and Shareholder Services Plan; (b) printing and postage
expenses rela ted to preparing and distributing materials, such as shareholder
reports, prospectuses and proxies, to current shareholders of a specific Class;
(c) Securities and Exchange Commission and Blue Sky registration fees incurred
by a specific Class; (d) t he expense of administrative personnel and services
as required to support the shareholders of a specific Class; (e) litigation or
other legal expenses relating solely to a specific Class; (f) transfer agent
fees identified by the Fund's transfer age nt as being attributable to a
specific Class; and (g) Board members' fees incurred as a result of issues
relating to a specific Class.
5. Conversion Features. Class B shares shall automatically
convert to Class A shares after a specified period of time after the date of
purchase, based on the relative net asset value of each such Class without the
imposition of any sales charge, fee or other charge, as set forth on Schedule E
hereto. No other Class shall be subject to any automatic conversion feature.
6. Exchange Privileges. Shares of a Class shall be
exchangeable only for (a) shares of the same Class of other investment companies
managed or administered by The Dreyfus Corporation and (b) shares of certain
other investment co mpanies specified from time to time.
SCHEDULE A
Name of Fund Date Plan Adopted
Premier Equity Funds, Inc. September 11, 1995
(Revised as of December 1, 1996)
--Premier Aggressive Growth Fund
--Premier Growth and Income Fund
--Premier Emerging Markets Fund
Premier Global Investing, Inc. April 24, 1995
(Revised as of December 1, 1996)
Premier Growth Fund, Inc. April 12, 1995
(Revised as of December 1, 1996)
Premier Value Fund July 19, 1995
(Revised as of December 1, 1996)
SCHEDULE B
Front-End Sales Charge--Class A Shares--Effective December 1, 1996, the public
offering price for Class A shares, except as set forth below, shall be the net
asset value per share of Class A plus a sales load as shown below:
Total Sales Load
Amount of Transaction As a % of As a % of
offering price net asset value
per share per share
Less than $50,000 5.75 6.10
$50,000 to less than $100,000 4.50 4.70
$100,000 to less than $250,000 3.50 3.60
$250,000 to less than $500,000 2.50 2.60
$500,000 to less than $1,000,000 2.00 2.00
$1,000,000 or more -0- -0-
Front-End Sales Charge--Class A Shares--Shareholders Beneficially Owning Class A
Shares on November 30, 1996*--For shareholders who beneficially owned Class A
shares of a Fund on November 30, 1996, the public offering price for Class A
shares of such Fund, except as set forth below with respect to certain
shareholders of Premier Agressive Growth Fund, shall be the net asset value per
share of Class A plus a sales load as shown below:
Total Sales Load
Amount of Transaction As a % of As a % of
offering price net asset value
per share per share
Less than $50,000 4.50 4.70
$50,000 to less than $100,000 4.00 4.20
$100,000 to less than $250,000 3.00 3.10
$250,000 to less than $500,000 2.50 2.60
$500,000 to less than $1,000,000 2.00 2.00
$1,000,000 or more -0- -0-
Front-End Sales Charge--Class A Shares of Premier Aggressive Growth Fund Only--
Shareholders Beneficially Owning Class A Shares on December 31, 1995*--For
shareholders who beneficially owned Class A shares of Premier Aggressive Growth
Fund on December 31, 1995, the public offering price for Class A shares of
Premier Aggressive Growth Fund shall be the net asset value per share of Class A
plus a sales load as shown below:
Total Sales Load
Amount of Transaction
As a % of As a % of
offering price net asset value
per share per share
Less than $100,000 3.00 3.10
$100,000 to less than $250,000 2.75 2.80
$250,000 to less than $500,000 2.25 2.30
$500,000 to less than $1,000,000 2.00 2.00
$1,000,000 or more 1.00 1.00
Contingent Deferred Sales Charge--Class A Shares--A CDSC of 1.00% shall be
assessed at the time of redemption of Class A shares purchased without an
initial sales charge as part of an investment of at least $1,000,000 and
redeemed within one year of purchase. The terms contained in Schedule C
pertaining to the CDSC assessed on redemptions of Class B shares (other than the
amount of the CDSC and its time periods), including the provisions for waiving
the CDSC, shall be applicable to the Class A shares subject to a CDSC. Letter
of Intent and Right of Accumulation shall apply to such purchases of Class A
shares.
_________________________
* At a meeting scheduled to be held December 16, 1996, shareholders of
Premier Strategic Growth Fund will vote on a proposal to merge such Fund into
Premier Aggressive Growth Fund. If such merger is approved, shareholders of
Premier Strategic Growth Fund who receive Class A shares of Premier Aggressive
Growth Fund in the merger will be deemed to have beneficially owned such shares
as of the date they beneficially owned Class A shares of Premier Strategic
Growth Fund for purposes of the fr ont-end sales charge applicable to purchases
of Class A shares of Premier Aggressive Growth Fund.
SCHEDULE C
Contingent Deferred Sales Charge--Class B Shares--A CDSC payable to the Fund's
Distributor shall be imposed on any redemption of Class B shares which reduces
the current net asset value of such Class B shares to an amount which is lower
than the doll ar amount of all payments by the redeeming shareholder for the
purchase of Class B shares of the Fund held by such shareholder at the time of
redemption. No CDSC shall be imposed to the extent that the net asset value of
the Class B shares redeemed does not exceed (i) the current net asset value of
Class B shares acquired through reinvestment of dividends or capital gain
distributions, plus (ii) increases in the net asset value of the shareholder's
Class B shares above the dollar amount of all payments for the purchase of Class
B shares of the Fund held by such shareholder at the time of redemption.
If the aggregate value of the Class B shares redeemed has
declined below their original cost as a result of the Fund's performance, a CDSC
may be applied to the then-current net asset value rather than the purchase
price.
In circumstances where the CDSC is imposed, the amount of the
charge shall depend on the number of years from the time the shareholder
purchased the Class B shares until the time of redemption of such shares.
Solely for purposes of d etermining the number of years from the time of any
payment for the purchase of Class B shares, all payments during a month shall be
aggregated and deemed to have been made on the first day of the month. The
following table sets forth the rates of t he CDSC:
CDSC as a % of
Year Since Amount Invested
Purchase Payment or Redemption
Was Made Proceeds
First 4.00
Second 4.00
Third 3.00
Fourth 3.00
Fifth 2.00
Sixth 1.00
In determining whether a CDSC is applicable to a redemption, the
calculation shall be made in a manner that results in the lowest possible rate.
Therefore, it shall be assumed that the redemption is made first of amounts
representing shares acquired pursuant to the reinvestment of dividends and
distributions; then of amounts representing the increase in net asset value of
Class B shares above the total amount of payments for the purchase of Class B
shares made during the precedi ng six years; then of amounts representing the
cost of shares purchased six years prior to the redemption; and finally, of
amounts representing the cost of shares held for the longest period of time
within the applicable six-year period.
Waiver of CDSC--The CDSC shall be waived in connection with (a) redemptions made
within one year after the death or disability, as defined in Section 72(m)(7) of
the Internal Revenue Code of 1986, as amended (the "Code"), of the shareholder,
(b) rede mptions by employees participating in qualified or non-qualified
employee benefit plans or other programs where (i) the employers or affiliated
employers maintaining such plans or programs have a minimum of 250 employees
eligible for participation in such plans or programs, or (ii) such plan's or
program's aggregate investment in the Dreyfus Family of Funds or certain other
products made available by the Fund's Distributor exceeds one million dollars,
(c) redemptions as a result of a combination of any investment company with the
Fund by merger, acquisition of assets or otherwise, (d) a distribution following
retirement under a tax-deferred retirement plan or upon attaining age 70-1/2 in
the case of an IRA or Keogh plan or custodial account pursuant to Section 403(b)
of the Code, and (e) redemptions pursuant to any systematic withdrawal plan as
described in the Fund's prospectus. Any Fund shares subject to a CDSC which
were purchased prior to the termination of such waiver shall have the CDSC
waived as provided in the Fund's prospectus at the time of the purchase of such
shares.
Amount of Distribution Plan Fees--Class B Shares--.75 of 1% of the value of the
average daily net assets of Class B.
SCHEDULE D
Contingent Deferred Sales Charge--Class C Shares--A CDSC of 1.00% payable to the
Fund's Distributor shall be imposed on any redemption of Class C shares within
one year of the date of purchase. The basis for calculating the payment of any
such CDSC shall be the method used in calculating the CDSC for Class B shares.
In addition, the provisions for waiving the CDSC shall be those set forth for
Class B shares.
Amount of Distribution Plan Fees--Class C Shares--.75 of 1% of the value of the
average daily net assets of Class C.
SCHEDULE E
Conversion of Class B Shares--Approximately six years after the date of
purchase, Class B shares automatically shall convert to Class A shares, based on
the relative net asset values for shares of each such Class, and shall no longer
be subject to th e distribution fee. At that time, Class B shares that have
been acquired through the reinvestment of dividends and distributions ("Dividend
Shares") shall be converted in the proportion that a shareholder's Class B
shares (other than Dividend Shares ) converting to Class A shares bears to the
total Class B shares then held by the shareholder which were not acquired
through the reinvestment of dividends and distributions.
